Sunday, July 17, 2016

How Gilead Sciences Dodged $10 Billion in US Taxes

By Eric Pianin
July 13, 2016

t was bad enough that Gilead Sciences, the California-based pharmaceutical giant, has been charging seriously ill Americans and government health providers -- including Medicare, Medicaid and the Department of Veterans Affairs – sky-high prices for its drugs that treat the potentially fatal hepatitis C virus.

Gilead earnings have rocketed up the charts with sales of the specialty drugs Sovaldi and Harvoni, which carry retail list prices of between $84,000 and $94,500 for a standard 12-week treatment to cure the liver disease. In recent years, the company has grown to become one of the largest drug manufacturers in the world, with revenues last year of $32.6 billion.


Now comes a new report asserting that Gilead has moved a substantial portion of its assets to a tax shelter in Ireland, allowing income from some of its U.S. drug sales to be shifted abroad and taxed at a much lower rate than the top corporate rate of 35 percent in this country. And, according to Americans for Tax Fairness, a left-leaning advocacy group and watchdog, Gilead has also avoided paying nearly $10 billion in taxes by refusing to bring some of its foreign profits back to the U.S.

The report released Wednesday found Gilead’s sales and profits have soared since the drugs launched, while its tax rate has dropped substantially. “Gilead’s worldwide revenues recently tripled—from $11.2 billion in 2013 to $32.6 billion in 2015,” the study found. “Corporate pre-tax profits soared even more: rising from $4.2 billion to $21.7 billion from 2013 to 2015, a five-fold increase. But, over the same period Gilead’s worldwide effective tax rate plummeted by 40%—dropping from 27.3% in 2013 to 16.4% in 2015.”


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