I heard an estimate today that 20% of each dollar earned in the US next year will be spent on health care. Somebody is clearly getting rich. Maybe that’s why the Internal Revenue Service (IRS) is gunning for pharmaceutical companies. After announcing a huge settlement with GSK just months ago, the IRS announced a similar settlement this week with Merck & Co., Inc. and its subsidiaries. The settlement means that Merck will pay about $2.3 billion (again, like with GSK, this with a B) in federal tax, interest, and penalties to resolve issues for the tax years 1993-2001.
Like with GSK, part of Merck’s tax problems involved shifting income out of the country to avoid taxation.
While Merck has resolved its US issues, it still has Canadian taxing authorities to deal with. A dispute with our friends to the north involving about $2 billion remains outstanding. Kind of sucks, eh?
