Pfizer may cost €1 billion lost tax to Ireland 2012

Off Patent drugs are major tax loss in 2012How dependent is Ireland tax revenue on patent drugs going off patent in 2011?

Without an extensive study by analysts and having been involved in the pharmaceutical industry for the last 15 years this is a sobering back of a napkin calculation. Lipitor will account for €7-€8 billion in sales this year, maybe, down a couple of billion since Zocor, a competitor, went generic. When a statin comes off patent the company that makes the proprietary version should see a sales loss of 80% or more.

Depending on how much of that profit it retains in Ireland as all production is here so we can see that the revenue in 2012 for Lipitor could be best case at €1.5-2 billion profit which is potentially a drop of €700 million of tax revenue. Take in the Viagra active ingredient production which also goes off patent and you could see a drop of tax revenue in 2012 from Pfizer alone of €1 billion.

This will put a serious hole in the tax receipts which may not be included in the Department of Finance numbers for that and subsequent years.


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