5 global drugmakers pay the lowest taxes

People are piling on Pfizer (PFE), incensed about the drug giant's plan to merge with its smaller Irish rival Allergan in a deal known as an "inversion" that will essentially cut the U.S.-based company's tax bill in half.

The critics might want to stop giving Pfizer such a hard time. The company is actually just trying to get what its major foreign rivals already have.

Five global drugmakers, including Britain's AstraZeneca (AZN) and Mylan (MYL) and Switzerland's Novartis (NVS) paid the lowest effective tax rates over the past 12 months of 17.5% or less, according to a USA TODAY analysis of data from S&P Capital IQ. The analysis looks at all the 14 pharmaceutical companies in the S&P Global 100 index and the Standard & Poor's 500 that reported valid effective tax rates over the past 12 months.

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Just one U.S.-based drug maker, Eli Lilly (LLY) is in the lineup of industry players with the lowest five tax rates, underscoring the disadvantage many firms based here face when trying to compete with global powerhouses. The 14 global pharmaceuticals companies paid an average effective tax rate of 17% - well below the average 24.7% average effective tax rate paid by the 6 U.S. based firms.

Seeing how foreign drugmakers are oceans apart in the taxes they paid helps explain why Pfizer was eager to put together a deal that would essentially result in it being bought by a Ireland-based Allergan. The potential tax savings could put in more on equal footing with other global drug giants.

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Mallinckrodt is the low tax leader. The Irish drug company reported an income tax credit of $92.9 million during the past 12 months, says S&P Capital IQ. That's a nice offset for the company that reported earnings before taxes of $215.3 million.

AstraZeneca is another tax champ. The drug company that Pfizer tried successfully to buy last year reported an effective tax rate of less than 0%. It reported an income tax credit of $10 million on earnings before taxes excluding usual items of $1.7 billion. Not bad.

Compare that against the Pfizer's effective tax rate of 24.5% at Pfizer and it's not difficult to see why the company might be trying to find ways to lower the tax burden.

Matt Krantz on Twitter: @mattkrantz.