NEW YORK, Sept. 28 (UPI) -- U.S. drug giant Merck used its blockbuster cholesterol-lowering drugs Zocor and Mevacor to also lower its tax bill, the Wall Street Journal says.
In a report published Thursday, the newspaper said that, 13 years ago, the drug giant created a Bermuda-based subsidiary in partnership with a British bank, then transferred the Zocor ad Mevacor patents to that offshore subsidiary.
By paying its Bermuda unit for use of the two drug patents, Merck was able to make a portion of the profits from sales of the blockbuster lipid-lowering treatments "to disappear into kind of a Bermuda triangle between different tax jurisdictions," WSJ said.
As a result, Merck was able to cut $1.5 billion from its tax bills over approximately the next decade.
The undisclosed arrangement has prompted one of the largest tax disputes in history involving a major U.S. corporation, the newspaper said, noting that Merck anticipates having to pay $2.3 billion to the IRS in back taxes, interest and penalties.
