Healthy Skepticism Library item: 8589

Warning: This library includes all items relevant to health product marketing that we are aware of regardless of quality. Often we do not agree with all or part of the contents.

Publication type: news

Merck Settles IRS Dispute for $2.3 Billion
SeekingAlpha 2007 Feb 15
http://seekingalpha.com/article/27132-merck-settles-irs-dispute-for-2-3-billion

Full text:

Merck & Co., the third largest U.S. prescription drug manufacturer, has settled a $2.3 billion dollar tax dispute with the IRS from 1993-2001 over overseas tax havens and minority equity interest financing transactions — for $1.5b less than the IRS had been seeking — but one of the IRS largest settlements ever. The dispute reflects a broader crackdown by U.S. and Canadian authorities on pharmaceutical company’s tax maneuvering. Merck rival GlaxoSmithKline settled its tax dispute with the IRS last year for $3.1 billion. Merck said the settlement would not affect their bottom line as they had set aside reserves for it. With $4.4b in profits last year, the company still has several current and potential legal battles ahead: A $1.76b tax dispute with Canadian authorities, multibillion dollar litigation over the recalled Vioxx painkiller and the recently discovered gastro-intestinal side-effects on children from its anti-Rotavirus medicine Rotateq. Merck shares were up $0.11 to $44.06 yesterday. The stock has risen 27% in the past 12 months and 1.1% in 2007.