Pharmaguy's Insights Into Drug Industry News
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Pharmaguy's Insights Into Drug Industry News
Pharmaguy curates and provides insights into selected drug industry news and issues.
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Obama Knocks Pfizer HQ Out of Ireland Back Into the USA - Yay!

Obama Knocks Pfizer HQ Out of Ireland Back Into the USA - Yay! | Pharmaguy's Insights Into Drug Industry News | Scoop.it

Pfizer said it would walk away from its planned $150 billion takeover of Allergan, after the Obama administration took aim at the deal that would have moved the biggest drug company in the U.S. to Ireland to lower its taxes. 

 

The Wall Street Journal reported Tuesday that Pfizer's board had voted to halt the combination and the New York-based pharmaceutical company then notified Dublin-based Allergan. Pfizer will pay Allergan a breakup fee of $150 million. 

 

The decision to walk away is the latest setback in Pfizer's long-running efforts to overcome what Chief Executive Ian Read has said was the company's competitive disadvantage with foreign rivals that faced significantly lower tax bills.


The apparent decision comes after the U.S. Treasury Department issued rules to make such "tax inversion" deals less profitable and after President Obama had harsh words for such moves.

Analysts said the unexpectedly aggressive tax law changes issued late Monday, and their timing, were aimed squarely at preventing New York-based Pfizer, the biggest U.S.-based drug maker from completing its proposed $160 billion Allergan acquisition and inversion in the second half of the year.

"The Obama administration isn't just sending a message to Pfizer, it's sending a message to all U.S. companies contemplating inversions, and that message is 'Don't,"' said analyst Steve Brozak, president of WBB Securities LLC.

Pharma Guy's insight:

Yay!

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5Marissa Kinne's comment, October 11, 2016 10:54 PM
the role shown here is Chief guardian of economy. I didn't realize this company was the largest drug business in the US. I agree with Obama's decision because if the companies taxes are lower if they were to move out of the US, they could keep their prices the same or raise them to make more money for themselves instead of benefiting the country.
6AidanKeller's curator insight, October 12, 2016 2:37 PM
A. Chief executive
B. I did not know that you could move a company over seas just to get a tax cut. Very Smart
C. I agree with this method. I believe you should be able to do whatever you want to do with your money/company.
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Obama Wants #Pharma to Open Its Books to Justify High Drug Prices

Obama Wants #Pharma to Open Its Books to Justify High Drug Prices | Pharmaguy's Insights Into Drug Industry News | Scoop.it
Lawmakers are pressuring the drug industry to reveal how much it spends to develop, manufacture, and market new medicines.


For years, drug makers have argued that the rising prices of prescription medicines reflect, in part, the rising costs of discovery and development. Now, President Obama wants to peek behind the pharmaceutical curtain to see for himself.


Buried inside the White House budget proposal released last week is language (on page 62) that would require drug makers to publicly disclose various data, including research and development costs. The administration hopes to use the information as part of a plan to negotiate lower prices for the Medicare drug program, known as Part D.


In doing so, Obama joins a growing list of lawmakers seeking transparency in order to understand drug pricing.


Since the pharmaceutical industry conceded that data are available under the Sunshine Act, “they can hardly claim that these R&D bills aren’t fair political game,” said Scott Gottlieb, a former Food and Drug Administration official who is now a resident fellow at the American Enterprise Institute, a conservative think tank.


In effect, the call for cost transparency amounts to a “show me” moment for the pharmaceutical industry.


Drug makers can’t have it both ways. If costs really can be justified, then expenses should be disclosed. If not, then the industry will have to come up with another explanation for its approach to pricing — and that explanation will have to be transparent.


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