Morning Briefing
Summaries of health policy coverage from major news organizations
After Merger To Create 'Drug Behemoth,' Pfizer Already Considering Splitting New Company
The Wall Street Journal: Pfizer Weighs Splitting Up New Drug Behemoth
The $155 billion agreement to combine Pfizer Inc. with Allergan PLC would create a drug behemoth so big that Pfizer is already thinking of breaking it up. The deal, which was announced Monday, brings together a diverse stable of drugs, from Pfizer’s cancer medicines and vaccines, to Allergan’s skin-care treatments and eye drugs. The companies expect to achieve $2 billion in cost savings as well as significant tax benefits from the deal .... Pfizer executives have for years considered splitting the company, but they have been deterred by concerns that its businesses may not be large enough to stand alone. Now, with Allergan, the company would have strength in both high-cost, high-growth drugs as well as generic, lower-cost drugs to make such a split. (Rockoff, 11/23)
The New York Times: Pfizer Chief Defends Merger With Allergan As Good For U.S.
In phone calls to Washington lawmakers and Obama administration officials, the chief executive of the largest drug maker in the nation had a surprising message: A deal that would allow the company to move its headquarters to Ireland was actually good for the United States. The Scottish-born chief executive of Pfizer, Ian C. Read, told them that a merger with Allergan, the maker of Botox that is based in Dublin, would significantly cut Pfizer’s tax bill and give it more cash that it could invest in the United States and ultimately add jobs, according to people briefed on the calls. He made the calls in recent days as the two companies were hammering out a $152 billion deal. (de la Merced, Gelles and Picker, 11/23)
The Wall Street Journal: Pfizer Inversion Puts Pressure On U.S. Lawmakers To Revamp Tax Rules
Pfizer Inc.’s decision to escape the U.S. tax system by putting its legal headquarters in Ireland has stoked another round of calls in Washington to revamp tax rules and protect the corporate tax base. But even Pfizer’s merger with Allergan PLC, the largest inversion deal ever, doesn’t look likely to dislodge the obstacles preventing action. (Rubin, 11/23)
The Associated Press: $160B Deal To Combine Pfizer And Allergan Raises Outcry
A $160 billion deal announced Monday to merge Pfizer and Allergan and create the world's biggest drug company renewed the outcry in Washington over "inversions," in which U.S. corporations combine with companies overseas to lower their tax bill. The combination — the second-largest merger in history — could have ramifications around the globe, pushing up drug prices and spurring more such deals in the fast-consolidating health care sector and other fields. It is also increasing the election-year backlash from U.S. politicians who have been blasting drugmakers recently over medicine prices that can exceed $100,000 a year. (Johnson and Murphy, 11/23)
The Washington Post: Pfizer’s Tax-Avoiding Megamerger With Allergan Sparks Outcry
A $160 billion megamerger announced Monday would turn U.S. pharmaceutical behemoth Pfizer Inc. into an Irish drug company, using a controversial tactic that allows companies to dodge billions of dollars in corporate taxes by renouncing their U.S. citizenship. Pfizer’s deal with Botox-maker Allergan, which would create the world’s largest drugmaker, immediately sparked criticism from Democrats and Republicans in Congress who agree that such deals are problematic but have so far not taken legislative action against them. (Johnson and Merle, 11/23)
The New York Times: Drug Merger Reignites Tax Reform Discussion
For almost four years, Congress and the White House have done little to make their long-promised overhaul of the corporate tax code a reality. Now the blockbuster pharmaceutical merger of Pfizer and Allergan has put new pressure on all sides to act. (Calmes, 11/23)
Reuters: Pfizer To Buy Allergan In $160B Deal
[Allergan CEO Brent] Saunders said the combination would provide access to about 70 additional worldwide markets for Allergan products, such as Botox wrinkle treatment, Alzheimer's drug Namenda and dry-eye medication Restasis. For 166-year-old Pfizer, Allergan would be the fourth huge acquisition over the last 15 years - one for each of the last 4 CEOs - following purchases of Warner-Lambert, Pharmacia and Wyeth. This also caps a record year for healthcare mergers and acquisitions, taking their cumulative value in 2015 to more than $600 billion. (Pierson and Berkrot, 11/24)
CNN Money: Pfizer And Allergan Combine In Biggest Drug Merger Ever
The mega deal is also the latest example of the massive wave of consolidation in health care. Drug makers, insurers, hospitals and pharmacies have raced to bulk up in recent years as the business landscape has been altered by Obamacare and an aging population. (Wattles and Long, 11/23)
