Amgen to pay $74 million to settle suit linked to Puerto Rico operations

By THE STAR STAFF

Amgen has agreed to pay $74 million to settle a lawsuit brought by investors who say the company failed to disclose a potential $10.7 billion tax bill from the Internal Revenue Service (IRS), a liability tied to profits generated through its Puerto Rico manufacturing operations.

Fierce Pharma reported the information.

The settlement request was filed Monday in federal court in the Southern District of New York. Investors argued that Amgen kept the tax dispute hidden between 2020 and 2022, preventing the public from understanding the scale of the company’s legal and financial exposure.

Judge John Cronin, who rejected Amgen’s attempt to dismiss the case in 2024, wrote that the “sheer size of the potential liability” meant investors were entitled to clearer information, according to Fierce Pharma.

In a statement, Amgen said it continues to believe the claims “are without merit” and emphasized that the settlement does not include any admission of wrongdoing. The company said it chose to settle to avoid a lengthy and costly legal fight.

The underlying tax dispute, however, remains unresolved. The IRS argues that Amgen shifted tens of billions of dollars in profits to its Puerto Rico subsidiary over several years, reducing the amount of taxes it owed in the United States. Amgen operates one of the island’s largest pharmaceutical manufacturing sites.

In 2022, the company disclosed that it had received a notice of deficiency for tax years 2013 through 2015, with the IRS seeking to increase Amgen’s taxable income enough to generate a $5.1 billion bill plus interest. The agency also proposed roughly $2 billion in penalties. A similar notice for 2010 through 2012 carried a $3.6 billion assessment, and audits for 2016 through 2018 are still underway.

Amgen has pushed back on the IRS’s findings, arguing that the agency undervalues the importance of its Puerto Rico operations and that the proposed adjustments are overstated by about $2 billion.

The settlement ends the investor lawsuit but leaves open the question of how much Amgen may ultimately owe the federal government — a decision that could take years to resolve and carries significant implications for one of the world’s largest biotechnology companies.