Pfizer will have to find a way to boost profits that doesn’t entail cutting its tax bill. In early 2016, the U.S. Treasury Department scuttled its planned inversion with Ireland-based Allergan, which would have moved the Big Pharma company’s headquarters overseas. The New York-based drug maker, which benefited from its blockbuster medication Lipitor before it went off patent, was hoping to reduce its tax rate through the $150 billion deal, which would have been the largest pharmaceutical merger in history. Instead, Pfizer will have to focus on reviving its core business, which has been in decline. The company’s sales dropped 1.5% in 2015 as it still deals with the impact of patent expirations on some of its biggest drugs. Its profits, meanwhile, fell nearly 24%, largely due to a surge in acquisition-related costs, which more than quintupled from the previous year due to Pfizer’s purchase of Hospira in early 2015. Pfizer’s stock fell 14.2% in 2015, a result of its performance as well as concerns that drug price regulation could hamper its profitability.
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The pharma company will pay for the deal in cash.
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It would have created the largest drug company in the world.