On July 11, a Paris-based company called HRA Pharma filed an application with the Food and Drug Administration to sell over-the-counter contraceptives in U.S. markets. The pharmaceutical company prides itself on being “the European leader in emergency hormonal contraception.”
HRA Pharma, which has been pimping birth control since 1996, recently came under new ownership. The company’s CEO David Wright announced that HRA had been bought out in cash by Michigan-based pharmaceutical company Perrigo for approximately $1.9 billion in May of this year.
The New York Times ran a piece in July that described Perrigo as “a multinational maker of over-the-counter pharmaceuticals based in Dublin.”
That’s right. Perrigo’s executive offices are in Allegan, Michigan, while their legal headquarters is positioned in Dublin, Ireland. In 2013, Perrigo completed one of the biggest tax inversions in U.S. history. The company, then known as Perrigo Inc., bought the Irish drug firm Élan, moved its headquarters to downtown Dublin, and formed Perrigo Company PLC.
With Gaelic pride and a box full of Easy Buttons, Perrigo shipped its paperwork over to Ireland and took on the nation’s 12.5 percent corporate tax rate.
The move to Dublin was not the only time Perrigo has looked at the world as its oyster. Four days before HRA Pharma’s FDA application went public, NYTreported that Ernst & Young consulted Perrigo to soothe their tax-induced indigestion by incorporating in Israel:
In 2005, tax advisers at EY devised a plan that would help Perrigo, then based in Allegan, Mich., avoid U.S. taxes on its popular anti-heartburn medication, omeprazole.
If Perrigo had bought omeprazole from a manufacturer and then sold the pills to customers in the United States, its profits would have resided in America. They would have been subject to what at the time was the country’s 35 percent corporate income tax rate, among the world’s highest.
EY created a workaround. Perrigo set up a subsidiary in Israel, with no employees and no offices, to buy the omeprazole. Then that shell company sold the pills to Perrigo in the United States at a profit. That meant that Perrigo’s income on the pills largely remained in Israel rather than in the United States, out of reach of the I.R.S. And because of the vagaries of Israeli tax law, the profits weren’t taxed in Israel, either.
Some members of the Senate have been lobbying against the practice of tax inversions for years. Sen. Carl Levin (D-MI) introduced the Stop Corporate Inversions Act in 2014, and Sen. Dick Durbin (D-IL) re-introduced it in 2015, 2017, 2019, and 2021.
Durbin introduced this year’s version of the bill with Sen. Jack Reed (D-RI) and Rep. Lloyd Doggett (D-TX-35). None of their offices responded to requests for comment from The American Conservative.
In 2014, Obama’s Treasury Secretary Jacob Lew called the practice an “abuse of our tax system.”
Preston Brashers, senior policy analyst in tax policy at the Heritage Foundation, said that inversions cause “fewer good jobs in the United States. Even if you have some of your decision making happening in the U.S., more and more of that activity will typically be shifted overseas.” Brashers went on to say that “from a U.S. taxpayer standpoint, obviously you don’t want to see a lot of corporate tax inversions, because as you’re moving large amounts of these corporate profits overseas, that just leaves more and more taxes to be paid by all the other businesses and individuals, so everyone else’s tax burdens go up.”
The pill that HRA hopes to bring to market sells under the brand name Opill, a progestin-only pill (POP), which contains the synthetic steroid progestin. This category differs from combination oral contraceptives (COC), which contain both estrogen and progestin.
Donna Harrison, M.D., CEO of the American Association of Pro-Life Obstetricians and Gynecologists (AAPLOG), told The American Conservative that if HRA’s application is granted, “you are likely to see an increase in ectopic pregnancies, because more women are using them. You’re going to see an increase in healthcare utilization for those who can afford it because of the increased, irregular bleeding and spotting. You’re likely to see a decrease in the interface between the sexually active teen population and healthcare providers, which is not a good idea for the teens.”
The FDA label for Opill lists ectopic pregnancy, ovarian cysts, bleeding pattern alterations, and liver disease as warnings for the medication and describes irregular menstrual patterns as “common” for women using the medication. Dr. Harrison described a scenario in which “[A patient] has some abnormal bleeding, and she has abdominal pain. She might say ‘maybe we’ll just sit it out.’ The problem is if you wait and you don’t get an ectopic pregnancy diagnosis, it ruptures, and then you die.”
The doctor’s primary concern lies in “appropriate patient care, especially of higher risk populations who need screening for STDs, who need informed consent, who need someone watching them for ectopic pregnancy that they go to.” She referred to over-the-counter access to the drug as a “bad idea” and “wrong-headed.” Alternatively, Harrison suggested, “what we ought to do is make it easier for people to access medical care.”
Originally found on American Conservative. Read More