LOS ANGELES, CA (February 20, 2013)-AIDS Healthcare Foundation (AHF), the largest global AIDS organization, today blasted U.S.-based drug company Gilead Sciences Inc. calling the company a “tax-supported tax-evader” after Gilead recently told investors that the intellectual property for a key compound in its new hepatitis C drug is “domiciled in Ireland.” Because income derived from patent royalties is tax-exempt in Ireland, this move could mean an additional $500 million a year in profit as the drug—which is not yet approved—is expected to be one of the world’s top-selling medicines. Analysts are forecasting that sales worldwide could be as much as $7 billion a year.
According to the Wall Street Journal (“A New Rx for Tax Bills,” by Jonathan D. Rockoff, February 6, 2013): “…Gilead Chief Financial Officer Robin Washington said during an earnings call Monday that the intellectual property for its hepatitis C compound ‘is domiciled in Ireland’. Ms. Washington didn’t go into further detail, and a Gilead spokeswoman declined further comment. Gilead estimates its tax rate for 2013 to be 26% to 28%, using ‘non-GAAP’ measures that don’t conform to generally accepted accounting principles. By shifting revenue on the compound to Ireland, Gilead could cut its overall tax rate to 21% or 222%….”
“It seems the greed of Gilead’s leaders knows no bounds, as they scheme to line their own pockets by evading U.S. taxes – all while enjoying the taxpayer-funded research that makes their business possible,” said AHF President Michael Weinstein. “Though unconscionable, this latest move should come as no surprise as Gilead has continually pursued prices hikes and exploited patent loopholes to maximize earnings on its lifesaving HIV/AIDS drugs. How? By charging government-funded programs—such as the AIDS Drug Assistance Program—exorbitantly high prices that limit access to their lifesaving medicines while making Gilead executives rich at taxpayer expense.”
For more information about Gilead’s history of HIV/AIDS price hikes and patent maneuvers, please see: Gilead Q4 earnings marks year of greed and price hikes.