AbbVie (ABBV) faces pressure Wednesday as the drugmaker takes questions from the Senate Finance Committee chairman regarding how it loses money in the U.S. and posts profit overseas.
Sen. Ron Wyden (D-Oregon) said in a letter to AbbVie Chief Executive Richard Gonzales that for 2020 the company reported a U.S. pretax loss of $4.5 billion and foreign pretax profit of $7.9 billion.
In that year the company generated 75% of its $34.9 billion of global sales in the U.S.
“It appears that AbbVie shifts profits offshore while reporting a domestic loss in the United States to avoid paying U.S. corporate income taxes, and that the current U.S.
international system seems to encourage that,” Wyden said, according to Bloomberg.
AbbVie shares at last check were little changed at $112.23.
The senator said he was investigating whether companies avoid taxes by shifting profits overseas. He said AbbVie was able to "successfully exploit the incentives to offshore profit" through a loophole created in a 2017 tax law signed by former President Donald Trump.
In May, the House Committee on Oversight and Reform said AbbVie used market power and the patent system to drive up the U.S. price of Humira, the world's top-selling drug, even as prices fell overseas.
Humira, which debuted in 2003 under Abbott Labs (ABT) , generated $20 billion of revenue in 2020. The drug treats rheumatoid arthritis and other autoimmune diseases. AbbVie was spun out of Abbott Labs in 2013.