Why does the U.S. have a large and growing trade deficit in pharmaceuticals?
I would argue that it is mostly because of (legal) tax avoidance.
cfr.org/blog/tax-games…
I would argue that it is mostly because of (legal) tax avoidance.
cfr.org/blog/tax-games…
Pharmaceutical companies use transfer pricing games to move profits out of the United States -- inflating the U.S. pharmaceutical import bill. And the Tax Cuts and Jobs Act doesn't appear to have gotten rid of the incentive to offshore production and profits. 
In some cases, the bilateral trade data is quite useful.
The large role Ireland, Switzerland and Singapore play in the overall U.S. pharmaceutical trade deficit certainly seems to me to be an important clue.
The large role Ireland, Switzerland and Singapore play in the overall U.S. pharmaceutical trade deficit certainly seems to me to be an important clue.
The blog obviously draws on my testimony to the House Ways and Means Health subcommittee last week -- which tried to lay out the tax games that have been facilitated by certain provisions of the Tax Cuts and Jobs Act.
waysandmeans.house.gov/sites/democrat…
waysandmeans.house.gov/sites/democrat…
And if there is an innocent (i.e. not tax related) explanation for the $40 billion jump in pharma imports over the past two years, I am all ears ...
