Drugs company Pfizer is to take over rival Allergan in a record-breaking deal. It will create the world’s largest drug manufacturer, valued at £212 billion.
In a clever accounting move the smaller company allegedly took over the big one.
Allergan is based in Ireland, home to a 12.5 percent corporate tax rate. Before the takeover Pfizer was paying 25.5 percent in the US. Not any more.
This is called “inversion” and it’s a wheeze for companies to avoid billions in tax.
Burger King became Canadian by buying a donut company.
Ireland already has the world’s largest banana company to go with its largest drugs company.
At £2.5 trillion, the total value of such deals so far this year exceeds the previous yearly high, set in 2007 just before the last financial crash.
But as well as the madness of global tax avoidance there is another pressure. Corporate
self-interest comes before people’s lives.
Research is merely to get the best patent not the best drug.
A level of duplication in research means the new company expects to save £1.4 billion on cuts regardless of the tax breaks it gets.
The next generation of drugs to treat major killers are at the whims of stock market investors’ tax scams.
That is a sickness at the centre of the system.