President Obama’s move to chop off the legs of any American company that moves overseas to avoid paying taxes could claim its first casualty soon -- a massive $160 billion deal between drugmakers Pfizer and Allergan.

Pfizer, the largest drug company in the United States, had been in talks to move its corporate address to Ireland in order to sidestep U.S. corporate policy. 

The practice, called “tax inversion,” happens frequently and legally allows companies to circumvent the tax code. Tax inversions take place when a U.S. company buys a foreign counterpart and then moves to that country to lower its tax bill.

On Tuesday, Obama who has been a vocal supporter of the push to reform corporate taxes, commended steps the Treasury Department took Monday to close the loophole.

In response, both Pfizer and Allergan are likely taking another look at the deal.

Reuters reported Tuesday that it is considering scrapping the deal with Allergan after the new Treasury measures. Pfizer reportedly is concerned that the Obama administration may change the rules again in a way that would wreck the deal.

Neither company has publicly addressed the issue but analysts and tax experts say the changes would kill the deal.

It’s been a tough go for Pfizer. The plan to merge with Allergan, the maker of Botox, was gearing up to be one of the largest in the pharmaceutical industry’s history. Until last year, Allergan was based -- and paid taxes – in Irvine, Calif. It was bought by Ireland-based drug maker Actavis for $66 billion.

So what’s next for Pfizer?

If the companies abandon the deal, it is unclear what Plan B would be. 

"Pfizer is aware that the Treasury will keep ruling against any solution it can come up with," a source familiar with negotations told Reuters.

The apparent targeting of a specific deal by the Obama administration was criticized by some Republicans. Former Texas Gov. Rick Perry accused the Obama administration of not focusing on the cause of the problem of companies leaving the U.S.

“If the president wants to address why businesses are leaving this country, he ought to address the corporate tax rate, not decide arbitrarily that he’s going to change the rules in the middle of the game,” Perry told Fox News.

Perry also expressed doubt that the Treasury has the authority to go through with its proposed plans.

The new regulations from the department seek to make the practice less appealing by limiting internal corporate borrowing that shifts profits out of the United States. 

Allergan shares fell 15 percent Tuesday, while Pfizer’s shares saw a slight rise of 2.1 percent.

The Allergan deal is not Pfizer’s first attempt at an inversion. In 2014 it sought to acquire Britain’s AstraZeneca PLC – a deal that ultimately fell through. Pfizer's top management has been desperately seeking a way to quickly boost the company's value and stock price amid years of relentless pressure from analysts and others to break up the company so growth and profits could accelerate. If that happened, Pfizer likely would spin off the established products business.

However, some analysts believe the Obama administration has its sights set much broader than this one deal.

"The Obama administration isn't just sending a message to Pfizer, it's sending a message to all U.S. companies contemplating inversions, and that message is 'Don't'," analyst Steve Brozak, president of WBB Securities LLC, told The Associated Press.

The Associated Press contributed to this report.