Marketplace®

Daily business news and economic stories

Lexapro’s incredible tax-dodging journey

Reporter Jesse Drucker follows the sale of a bottle of anti-depressant Lexapro to see if it's worth it for a company to dodge taxes.

Download

Corporations will sometimes go to great lengths to avoid paying taxes. Is it worth it? Reporter Jesse Drucker explores this idea in a Bloomberg article following the money from the sale of a bottle of anti-depressant Lexapro.

The journey beings with a $99 bottle of Lexapro sold to someone in Phoenix, Ariz. Drucker found that $85 of the purchase ends up with New York City-based Forrest Laboratories, which makes the drug. But the majority of the profits then travel to Ireland, where Forrest makes the pills at a manufacturing facility that enjoys low taxes. The company then makes licensing payments to a subsidiary of itself in Bermuda, which has no corporate income tax, shifting a majority of the income out of Ireland into Bermuda.

Forrest earned nearly a billion dollars in pre-tax income in 2009, and spends in the low millions to save about $200 million on taxes.

Related Topics

Tagged as:

Latest Episodes

View All Shows
  • Make Me Smart
    a day ago
    26:01
  • Marketplace
    a day ago
    25:42
  • Marketplace Morning Report
    2 days ago
    6:54
  • Marketplace Tech
    2 days ago
    8:03
  • Million Bazillion
    5 days ago
    28:24
  • How We Survive
    8 days ago
    25:04
  • This Is Uncomfortable
    9 days ago
    26:12
  • Financially Inclined
    3 months ago
    12:30
  • The Uncertain Hour
    4 months ago
    22:50
  • Corner Office from Marketplace
    5 years ago
    20:58