$160B deal to combine Pfizer and Allergan raises outcry

A $160 billion deal announced Monday to merge Pfizer and Allergan and create the world's biggest drug company renewed the outcry in Washington over "inversions," in which U.S. corporations combine with companies overseas to lower their tax bill.

The combination -- the second-largest merger in history -- could have ramifications around the globe, pushing up drug prices and spurring more such deals in the fast-consolidating health-care sector and other fields.

It also is increasing the election-year backlash from U.S. politicians who have been criticizing drugmakers recently over medicine prices that sometimes exceed $100,000 a year.

In what would be the biggest inversion ever, Pfizer could save hundreds of millions in U.S. taxes because it would move its tax headquarters from the U.S. to Ireland, where Allergan is based. Pfizer, which operates out of New York, would slash its tax rate from around 25 percent this year to about 18 percent.

Inversions long have been attacked by some politicians as a tax dodge, and Hillary Rodham Clinton and Bernie Sanders, the leading Democratic presidential contenders, criticized the deal.

The merger is subject to approval from regulators in the U.S., European Union and elsewhere.