Transfer Pricing Design for the New Business Model of a Major European Pharmaceutical Company in China

The Situation

A major European pharmaceutical company was facing numerous operational constraints including drug price/profit controls, royalty repatriation issues, and operating license requirements imposed by the Chinese government.

NERA's Role

NERA was retained to assist in developing the client's business model from a financial and transfer pricing perspective.

The Result

NERA's economic and financial analyses were key in helping the client to define an optimal business model that could fulfill its expectations in terms of cash flow and tax efficiency, while mitigating transition risks from a transfer pricing perspective.