Pharmaceutical multinationals generate substantial profits from their ownership of valuable intangible assets including patents and marketing intangibles. Their production activities are often vertically integrated with the production of active pharmaceutical ingredients occurring in Western Europe with the fill and finish function occurring in India. The transfer pricing challenges have led to numerous litigations where tax authorities have accused multinationals of shifting profits to tax havens. This article discusses the transfer pricing issues in litigations involving Canada, India and the United States, noting how the applications of market-based approaches versus profits-based approaches lead to very different results.