The IRS has bat­tled Big Phar­ma for years over off­shore patent trans­fer schemes, which it said have bilked the pub­lic in­ter­est by bil­lions of dol­lars. Now, loose lips at the agency have re­vealed its pur­suit of an­oth­er drug­mak­er — Bris­tol My­ers Squibb — that it says is on the hook for more than $1 bil­lion in back tax­es.

Bris­tol My­ers could face near­ly $1.4 bil­lion in back tax­es the IRS be­lieves it evad­ed pay­ing as part of a scheme to move its patent rights from the US to an Irish sub­sidiary and reap the in­come write-offs, the New York Times re­ports.

The dis­pute was re­vealed as part of an ac­ci­den­tal dis­clo­sure from the agency last spring, the Times said, which was al­most im­me­di­ate­ly pulled from pub­lic view.

At the cen­ter of the IRS’ claims is Bris­tol’s ef­fort in 2012 to es­tab­lish an Irish sub­sidiary as a ve­hi­cle to shut­tle US drug patent rights over to a coun­try with low­er cor­po­rate tax rates. In a scheme known as amor­ti­za­tion, com­pa­nies can write off the val­ue of an as­set — patents, for in­stance — from their tax­able in­come over a pe­ri­od of time. Bris­tol had al­ready writ­ten off the val­ue of its patents in the US, the IRS said, and set up a plan to move those rights to Ire­land, where that val­ue had not yet been writ­ten off.

The out­come? Around $1.38 bil­lion in back tax­es, the IRS said.

“Bris­tol My­ers Squibb is in com­pli­ance with all ap­plic­a­ble tax rules and reg­u­la­tions,” the com­pa­ny said in a state­ment. “We work with lead­ing ex­perts in this area and will con­tin­ue to work co­op­er­a­tive­ly with the IRS to re­solve this mat­ter. Be­yond that, we don’t com­ment on on­go­ing reg­u­la­to­ry mat­ters.”

The scheme was lu­cra­tive, the Times re­port­ed. The com­pa­ny’s ef­fec­tive cor­po­rate tax rate was -7% in 2012 com­pared with 25% in 2011. The dif­fer­ence was so stark that an­a­lysts re­port­ed­ly quizzed ex­ec­u­tives on the dis­par­i­ty dur­ing a Q4 2012 earn­ings call — ques­tions that Bris­tol re­fused to an­swer.

Mean­while, Bris­tol My­ers’ plan re­port­ed­ly got a sign-off from two cor­po­rate au­di­tors, PwC and White & Case, in late 2012. Both firms sent lengthy let­ters to Bris­tol es­sen­tial­ly clear­ing the scheme — even af­ter Mer­ck had been cit­ed by the IRS back in 2006 for a sim­i­lar off­shoring ef­fort that saved it $1.5 bil­lion in fed­er­al tax­es over 10 years.

In that case, Mer­ck of­floaded its US patents to a Bermu­da sub­sidiary, which it then turned and paid for ac­cess to those patents, the IRS said. The amor­ti­za­tion scheme wasn’t even unique to Mer­ck: Oth­er big-name drug­mak­ers such as J&J, Pfiz­er and Ab­bott have all been im­pli­cat­ed in sim­i­lar plans in the past.

In a 2018 re­port, Ox­fam es­ti­mat­ed that off­shoring schemes were sav­ing those four drug­mak­ers around $2.3 bil­lion per year in US fed­er­al tax­es. In to­tal across nine de­vel­op­ing coun­tries in­clud­ing the US, Ox­fam es­ti­mat­ed the firms were writ­ing off around $3.7 bil­lion per year.

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The FDA and CDC have jointly decided to stop administering J&J’s Covid-19 vaccine after reviewing data involving six reported US cases of a rare and severe type of blood clot in individuals after receiving the vaccine.

CDC will convene a meeting of its Advisory Committee on Immunization Practices on Wednesday to further review these cases and assess their potential significance. “FDA will review that analysis as it also investigates these cases. Until that process is complete, we are recommending a pause in the use of this vaccine out of an abundance of caution,” Peter Marks, director of the FDA’s Center for Biologics Evaluation and Research and Anne Schuchat, Principal Deputy Director of the CDC, said in a joint statement Tuesday morning.

The US Court of Appeals for the Fifth Circuit on Tuesday upheld the Federal Trade Commission’s ruling that generic drugmaker Impax Laboratories should be charged with antitrust violations for accepting payments worth about $100 million to delay the entry of a generic opioid for more than two years.

The court’s opinion upheld the FTC’s anticompetitive findings on the deal between Impax (now owned by Amneal Pharmaceuticals) and Endo Pharmaceuticals, under which Endo committed to not market an authorized generic, which increased Impax’s projected profits by $24.5 million. Endo agreed to pay Impax credits for the shrunken market that Impax would inherit if, as expected, Endo made a successful hop to a reformulated Opana ER.

As co-director of an experimental cellular therapy process development and manufacturing group at UCSF specializing in T cell therapies for autoimmune conditions, Jonathan Esensten has learned a lot about the challenges involved when his group hand-fashions a cell therapy. Esensten — who was a postdoc in Wendell Lim’s lab and counts the legendary Jeffrey Bluestone as a mentor — gives them all high marks at being great at what they do, but time and again there are variations in the treatments they construct.

Anand Shah has served the American public in a unique way, crisscrossing over the last two administrations between serving as an attending radiation oncologist focused on prostate cancer at NIH, serving as CMO at the Center for Medicare and Medicaid Innovation, and most recently, leading the FDA’s operations on medical and scientific affairs from within the commissioner’s office.

Shah, who stepped down from the FDA in January, caught up with Endpoints News in a phone interview on Tuesday afternoon, offering his thoughts on the agency’s latest decision to pause the J&J vaccinations in the US, and reflecting on his time at an agency during this once-in-a-lifetime pandemic.