Pfizer under investigation in Italy for hiding a profit of 1.2 billion dollars
US-based pharmaceutical giant under investigation for alleged tax violation
Pfizer says it complies with Italian taxes and requirements
Bloomberg By Daniele Lepido – October 26, 2022, updated October 27, 2022
Pfizer Inc. is the target of an Italian investigation into which the company hid at least 1.2 billion euros ($1.2 billion) in profit by transferring money to businesses in other countries, according to sources close to the investigation.
Italy's financial police said Pfizer based just outside Rome, Pfizer Italia Srl, transferred excess capital to affiliates in the US and the Netherlands to avoid taxes on profits that could go as high as 26%, sources said. well-informed, who have asked not to be named as the information is not public.
The Italian branch of the company allegedly sent the capital to foreign subsidiaries related to Pfizer Production LLC and Delaware-based Pfizer Manufacturing LLC. The investigation into the New York-based drug giant began in February and covers 2017, 2018 and 2019, the sources said.
The investigation does not necessarily mean that Pfizer is actually involved in wrongful acts. At the end of the investigation, the findings will be reviewed by the Revenue Agency, which has the power to assess potential fines and tax payments if it deems it justified.
“Italian tax authorities regularly audit and investigate Pfizer taxes, and Pfizer cooperates with those audits and investigations,” company spokeswoman Pam Eisele said in an email response to questions. “Pfizer complies with Italian tax laws and requirements.”
Incoming Prime Minister Giorgia Meloni told parliament on Wednesday that under her administration the taxman would focus more on big companies and multinationals rather than the small local businesses that have often backed the centre-right forces that make up her coalition.
Pfizer shares fell briefly in New York on Wednesday before catching up to close higher by 1% .
The financial police said that Pfizer decided not to distribute dividends during the investigation period, remunerating shareholders through the reduction of the company's share capital. In the three years from 2017 to 2019, Pfizer generated a total of $33 billion in adjusted net income globally.
A spokesman for the Rome-based Italian Guardia di Finanza declined to comment.
The allegations bear some resemblance to a case involving the French luxury company Kering SA, owner of the Gucci brand, to reach a agreement of 1.25 billion euros, one of the largest payments of its kind ever made by a company in Italy.
The investigation examined activities at its Swiss subsidiary Luxury Goods International from 2011 to 2017 and focused on the amounts Kering invoiced for activities carried out in other countries at a Swiss fulfillment center, where it paid lower taxes than it would have paid in Italy.
Pfizer's Italian unit began operations nearly 70 years ago and employs around 2,000 people. The company has a plant in central Marche, where it produces pills for cancer and nervous system disorders, and one in Sicily, which produces sterile injectable drugs such as antibiotics.
Note: “Pfizer cooperates,” Pfizer spokeswoman Pam Eisele tells Bloomberg. “Pfizer complies with Italy's tax laws and requirements,” Eisele adds.
Related news: Pfizer and the other giants that have (or have had) problems with the taxman for billions of euros
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The procedures for purchasing anti Covid vaccines are unclear. Bourla, Pfizer CEO, refuses to testify
The purchases of Covid-19 vaccines made by the Commission on behalf of the 27 EU countries are being investigated. Purchases initially greeted with great praise for the supportive role played by the EU in a time of serious emergency, 
but then ended up in the crosshairs of two supervisory bodies: first of the European Ombudsman, led by Emily O'Reilly (in the picture), then of the EU Court of Auditors
The president of the community executive, Von der Leyen, would have violated the existing regulation to enter into a preliminary agreement with Pfizer, paving the way for a contract for 1.8 billion doses of vaccine. In practice, he conducted a personal negotiation with the pharmaceutical industry, forgetting to consult, as required by current regulations, the representatives of the member countries and to document his work.
Overall, according to a report by the EU Court of Auditors, released in early September, the EU Commission purchased 4.6 billion doses from the world's major pharmaceutical industries, at a cost of 71 billion euros, the highest single expenditure ever made by the EU. A purchase considered exorbitant, given that there are 447.7 million inhabitants of the EU, for which 10 doses each were purchased.
A table attached to the Court of Auditors' report indicates that the various pharmaceutical companies, including Moderna, each sold 200 to 300 million doses to the EU. All, except Pfizer, which took the lion's share, with 2.4 billion doses delivered in three phases, the first two of 300 million doses (November 2020, February 2021), the third of as many as 1.8 billion doses (May 2021). All with an income of 35 billion euros, out of the 71 spent by the EU. The investigations by the Ombudsman and the Court of Auditors focused above all on the third delivery, as the contract with Pfizer stipulated by Von der Leyen did not comply with the rules in force on the transparency of the documents.
For this reason, the EU Parliament has also decided to see clearly, with a Commission chaired by the Belgian MEP Kathleen Van Brempt, a socialist, who last week first visited the EMA, the European drug agency, then the headquarters of BionTech, the German pharmaceutical company that invented the anti-Covid vaccine produced by Pfizer. The testimony in Brussels for October 10 by Albert Bourla, CEO of Pfizer, was eagerly awaited in the commission, but he refused to testify.
The spokesperson for the American pharmaceutical company announced that Janine Small, head of the group for the development of international markets, will speak instead of Bourla at the Commission hearing. A clever trick, which once again will not allow the EU supervisory bodies to know what was written in the text messages that Von der Leyen and Bourla exchanged before the third contract for 1.8 billion doses. SMS whose existence was disclosed by the New York Times in 2021 to describe the "apparently cozy relationship" between Von der Leyen and Bourla. At the time a small journalistic scoop, which today risks becoming an avalanche.
(Source freely extracted from Italy Today)
Related news:
European Court of Auditors press release
Replies of the European Commission to the special report of the Court of Auditors
Ombudsman inquiry on Commission President's text messages is a wake-up call for EU
