Merck avoided billions in U.S. tax by offshoring Keytruda profits - senator

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Drugmaker Merck & Co avoided billions of dollars of U.S. taxes in recent years on its top-selling cancer drug Keytruda by booking all the profits from the treatment outside of the United States, according to an ongoing investigation by Democrats on the Senate Finance Committee.

Signage is seen at the Merck & Co. headquarters in Kenilworth, New Jersey, U.S., November 13, 2021. REUTERS/Andrew Kellyavoided billions of dollars of U.S. taxes in recent years on its top-selling cancer drug Keytruda by booking all the profits from the treatment outside of the United States, according to an ongoing investigation by Democrats on the Senate Finance Committee.

Democrats on the committee have been investigating how the tax law passed by Republicans in 2017 has benefited large U.S. pharmaceutical companies such as Merck and AbbVie and whether those companies have been exploiting foreign subsidiaries to avoid taxes.Wyden said in the letter that Merck was able to avoid U.S. taxes on Keytruda - even on sales in the United States - by holding patents in the Netherlands and manufacturing the drug in Ireland.

Merck's effective tax rate last year was 11%, Wyden said in his letter, just over half the current U.S. corporate tax rate of 21%.

 

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