Understanding the 2025 Perrigo Decision Through the Lens of a Craps Game

On September 25, 2025, Perrigo v. U.S. was decided, marking a significant win for the taxpayer, particularly in the Court’s finding regarding economic substance and risks.1The Federal Judge in the decision, before appointment, was a respected former private practice business litigator, appointed 18 years ago by President George W. Bush.2 He served as the circuit’s chief judge for seven years.3 And the Judge took the time to author a 133-page opinion that provides a comprehensive explanation of the generics pharma sector, of Perrigo, and of business risk in general.

To better understand the business risks underlying the Perrigo decision and Perrigo, I think it is necessary to examine Perrigo's history, including its prior tax controversies, its financials, and its first-to-market winner-takes-all pharma sector. And I am going to try to analogize Perrigo’s risk to a craps game. Be sure to comment on whether I made my point.

Perrigo’s Past Tax Controversies Resemble a Dice Game

Let’s start with Perrigo and Ireland’s Revenue Department clash over Perrigo’s characterization of the type of income from the April 3, 2013, sale of the IP in the multiple sclerosis drug Tysabri (to a third party, Biogen).4 The controversy led Ireland’s Revenue to issue its most extensive assessment to that date, equivalent to a US$1.9 billion notice of deficiency, on November 29, 2018.5 Perrigo’s share price fell 29 percent within 24 hours.

But this drop was part of a year-long 60 percent precipitous decline Perrigo was already suffering.6 And the declining 2018 share price should be viewed in the context of a continuous decline from Perrigo’s peak of $158 in 2015.7 For 2017, 2018, and 2019, Perrigo reported a declining operating income of $598 million, $237 million, and $175 million, respectively.8 Additionally, Perrigo’s EPS bounced like a yo-yo losing its elasticity: from an EPS high of $4.68 in 2013 to 29 cents for 2015, up to 95 cents in 2018, before entering negative EPS territory in 2020 (-$1.19), followed by four more years of negative EPS.

Meanwhile, on April 26, 2019, the IRS proposed an additional payment of $843 million related to Tysabri, for 2011-2013, which like the Irish deficiency, resulted from Elan’s tax years before Perrigo’s acquisition (and inversion).9 The adjustment represented additional tax based on the imputation of royalty income to Athena, a U.S. subsidiary of Elan, using a 24.7 percent royalty rate and a 40.0 percent accuracy-related penalty. The sum of Perrigo’s tax controversies going into 2019 totaled about 18 times its 2019 operating income ($175 million).10 That’s not an attractive financial risk position for an investor.

On January 3, 2019, just over a month after the Irish assessment, Florida pension funds initiated a U.S. shareholders' derivative lawsuit against Perrigo for failing to disclose the full extent of the Irish tax assessment.11For 2018, Perrigo reported a total liability for uncertain tax positions of $203.7 million, up from $204.0 million in 2017.12

The Irish Decision and Tax Liability Settlements

In 2020, Ireland’s High Court (a court of first instance) sided with Ireland’s Revenue that it had the authority to issue the tax assessment. However, the High Court left the decision regarding the correct characterization of the income, whether trading income taxed at 12 percent or a capital gain taxed at 33 percent, to the Tax Appeal Commission. Before a decision on the correct income characterization could be reached by the Irish Tax Appeal Commission, announced by Perrigo on September 29, 2021, Ireland’s Revenue settled for €297 million (about $350 million), less than 20 percent of the assessment, and without requiring interest or penalties, and without requiring Perrigo to amend its tax treatment of the IP sale.13  The Irish Revenue settlement resulted in a relatively low settlement of $31.9 million with Perrigo’s shareholders in October 2021. Moreover, on April 24, 2023, Perrigo received notice from the U.S. competent authority (APMA) that it had withdrawn the proposed Tysabri $843 million royalty adjustment as a final resolution.

Perrigo Made its Point

Relative to nearly $2.5 billion of tax deficiencies, Perrigo ‘made its point’. What do I mean? It’s like Perrigo was forced by its inversion acquisition of Elan to play a high-stakes game of craps, with a ‘point’ of 4 (a ‘come out’ first roll of 2+2, or a 3+1 on the dice faces). Losing is rolling a 7; there are three opportunities to roll a 7 (dice faces 1+6, 2+5, 3+4) versus the two opportunities for a 4. Other dice-face rolls that do not make the point or are just stress build-up toward the final roll of either the seven (lose) or ‘making the point’ (win). Inevitably, Perrigo rolled that point of 4, ending the tension of the arduous four years of litigation from the initial Irish notice to that of APMA’s resolution.

Craps but a Silver Lining

FYI: Perrigo’s 2015 shareholders rolled craps (by rejecting Mylan’s $34 billion acquisition valuation of over $230 a share). Perrigo’s share price remains in a (very) low trough of $13 relative to that peak. However, Perrigo offers a silver lining as a potentially interesting stock investment in 2025. For an investor focused on dividends and dividend yield, Perrigo has increased its dividend payout annually, from 39 cents in 2015 to $1.10 currently. And its declining stock price has resulted in an expanding dividend yield, from 0.33 percent to over 5.0 percent in 2025. That’s five percent against an S&P 500 average of approximately one percent dividend yield, and a percent better than a 10-year Treasury so far this month.

Perrigo’s First-to-Market Risk in its Private Labeling Generics Sector

The Perrigo v. U.S. Federal Court decision14 contains an extensive description of the high-risk sector of the generic pharmaceutical industry in which Perrigo operates. After reading the 212-page decision (Lexis’ pagination) and researching Perrigo’s past, as described above, I felt the stress of the high-risk life of a small generics pharmaceutical company rolling the dice against a table of deep-pocket Pharma competitors. Perrigo’s board seemingly felt the same: it divested from its generics prescription business in 2021.15

Let’s start with where Perrigo stood in the pharmaceutical market at the time of the 2009 IRS audit, long before this case materialized. Perrigo was the small, scrappy company taking on the giants of U.S. pharma, including Pfizer, Merck, J&J, Eli Lilly, and Bristol-Myers Squibb. Other non-U.S. headquartered significant players with substantial sales in the U.S. included GlaxoSmithKline, AstraZeneca, and Sanofi-Aventis. Perrigo did not have the research and development investment capital to invent the next ‘first out of the gate’ blockbuster patented drug; the highest risk, highest return in the pharma industry.

How much (monetary) risk? For 2024, pharma research and development spend for the ten big players was Merck leading with nearly $18 billion, followed by J&J ($17.2 billion), Roche ($14.6 billion), AstraZeneca ($13.6 billion, Abbvie ($12.8 billion), Bristol Myers Squibb ($11.2 billion), Eli Lilly ($11 billion), Pfizer ($10.8 billion), Novartis ($10 billion) and Sanofi ($7.98 billion). In 2024, in contrast, Perrigo invested just $112 million in research and development, albeit it had already walked away from its pharma business. Yet, in 2009, when Perrigo was rolling the dice at the pharm table, it had only $77 million in research chips to play with.

What is Craps?

Why does anyone play craps if rolls to make the point are three combinations to two against the player? Because in craps, it’s about wishful thinking and the risk of the first roll. A win/loss on the first roll, if these were the only two options, favors the player on a four-to-three combination basis. A win is rolling 7 or 11 out of the gate, which is achieved by three combinations for a 7 and an additional fourth for the 11 (6+5). A loss (craps) is 1+1 (2), a 2+1 (3), or 6+6 (12).

But in casinos, the house always has an edge. The first roll may instead set the point, for which the dice faces generate 14 other combinations: 4 (1+3, 2+2), 5 (1+4, 2+3), 6 (1+5, 2+4, 3+3), 8 (2+6, 3+5, 4+4), 9 (3+6, 4+5), or 10 (4+6, 5+5). So that first roll has just four potential wins (19 percent) out of 21 combinations, of which 3 are (14 percent) craps. There’s a 28.5 percent chance of setting the point at 6 or 8, which brings the player 50/50 with the house, but a 38 percent chance of the other points, which favor the house 40/60.

Relative to a $2.5 billion research and development bet that requires at least 10 years of rolling the dice against 10:1 odds to make the point (a prescription drug that solves an ailment for a large customer base), a game of craps is less risky and smaller bets. The copycat generics private-label sector does not require billion-dollar bets or 10-year horizons. It’s more like a race to make the point in the least rolls (first-to-market) against a field of global competitors who are also rolling for their marks.

Analysis of the 2025 Perrigo Decision

Perrigo’s Opening Dice Roll to Become First Mover

As the Trial Judge explains in the introduction of the decision, Perrigo’s role within the pharmaceutical industry is to identify patent-expiring blockbusters16 that Perrigo can become the first-mover for a reformulated generic equivalent for both prescription and over-the-counter (OTC) (i.e., non-prescription) sales.17First movers earn higher net margins on generic drugs than later market entrants.18 Perrigo’s U.S. domestic business focused on supplying over-the-counter, private-label, generic products to retailers for sale under their own brand names. Perrigo’s U.S. market share for private-label OTCs exceeded 60 percent.19

In the Federal Court case at hand, Perrigo identified AstraZeneca’s Prilosec, which had an initial patent on the active ingredient expiring in 2001 and a second formulation patent expiring in 2007, as a candidate for an OTC application switch to the FDA by AstraZeneca. Prisolec is a heartburn medication with an active ingredient omeprazole. Perrigo USA failed in its multiple attempts to reformulate the medication satisfactorily.

Perrigo Sets a Point With an Israeli Joint Venture

Instead, Perrigo partnered with an Israel-based generics competitor, Dexcel, through a 2005 production agreement to jointly achieve first-mover advantage. The agreement assigned Dexcel the risk of obtaining FDA approval for a successful generic, while Dexcel retained the intangibles associated with the development process exclusively and confidentially. The agreement provided for a 50/50 profit split after Perrigo received a net six-percent fee on sales and marketing. The transfer of this profit split agreement by Perrigo USA to its newly established Israeli foreign (fiscally transparent) subsidiary is at the center of the controversy.

Deconstructing the IRS's Doctrinal Attack

The IRS launched a primary attack on the fundamental legitimacy of Perrigo's foreign structuring. The IRS alleged that Perrigo’s fiscally transparent Israeli purchasing and distribution subsidiaries (Israel Trading Limited Partnership and Perrigo LLC) lacked economic substance and business purpose under three related jurisprudential doctrines designed to disregard "sham transactions" and the assignment of income to associated taxpayers.20These doctrines of economic substance, business purpose, and substance-over-form (often grouped under the rubric of sham transaction analysis) serve as judicial checks against abusive tax avoidance schemes. The central tension in these doctrines, originating from the landmark case Gregory v. Helvering,21lies in distinguishing between a transaction undertaken for a genuine commercial rationale, independent of tax benefits, and one undertaken for tax benefits without a plausible commercial purpose.

The IRS argued in the alternative that, via the transfer pricing regulations under IRC Section 482, nearly the entirety of Perrigo’s foreign source income should be re-allocated to Perrigo U.S. To cut to the chase, the Federal District Court concluded, based on the testimony and evidence presented at trial, that Perrigo U.S. transferred substantial risks associated with acquiring and distributing a generic for the U.S. market to the foreign subsidiaries, and also empowered the subsidiaries to bear the risks financially.22Regarding the IRS’ lack of economic substance argument, the Court stated:23

As a general matter, “[a] parent corporation may create subsidiaries and determine which among its subsidiaries will earn income.”

Regarding the IRC Section 482 issue, the Court held that applying the arm’s length standard requires the use of sales projections at the time of the assignment, not after-the-fact sales data.24

Let’s turn to the risks in the generic prescription sector. Perrigo had to obtain FDA approval that its proposed generic is bioequivalent to a national brand.25 The FDA process allows the patent holder to challenge, thereby extending the approval timeline to approximately three years.26 The FDA government application fees for a large generics company exceed $1 million, and professional fees typically exceed $1 million as well.27

In 2007, before the final FDA approval and Dexcel's production of the generic, Perrigo forecast a 2009 launch, with potential first-year sales of 25.6 million units and revenue of approximately $113 million if Perrigo were to be the first to market.28 In December 2007, Perrigo published a press release stating that Dexcel’s omeprazole product sales would fall in the range of $150- $ 200 million.

Applying the Doctrines to Perrigo

Let’s back up, though, to 2005 when Perrigo contracted with EY to advise the company on global structuring that would support Perrigo’s growth and business structure, while minimizing its tax liabilities and allowing access to after-tax cash.29 EY identified Perrigo’s non-U.S. third-party co-development agreements that carried significant upfront risk, including market risk, litigation risk, or other contingencies such as FDA approval. In 2006, based on EY’s advice, Perrigo began establishing its global structure, starting with a finance subsidiary in the United Kingdom that was fiscally transparent. Then, Perrigo established Perrigo Israel Trading Limited Partnership (Perrigo Israel LP), which elected with the IRS to be characterized as a corporation for U.S. tax purposes. Shortly thereafter, Perrigo formed a fiscally transparent Delaware LLC owned by Perrigo Israel LP. The purpose of Perrigo’s Delaware LLC was to minimize the exposure of Perrigo Israel LP to an Israeli tax filing. The LLC was engaged in late 2006 and early 2007 with Perrigo USA to distribute Dexcel’s omeprazole (and another OTC generic developed by the Israeli third-party Teva), should the FDA eventually approve Dexcel.

EY proposed a cost-plus transfer pricing method to account for Perrigo USA’s sunk cost in its failed attempt to develop omeprazole. Perrigo accepted the transfer pricing cost-plus method and report that determined that $877,832 was an appropriate arm’s-length price that accounted for the risk inherent in the Dexcel Supply & Distribution Agreement as of the November 2006 assignment date.30 Also, Perrigo Delaware would pay Perrigo USA based on a comparable profits method (CPM) for domestic distribution performance. The EY CPM study of competitors concluded on a market-based 4.31 percent markup on distribution costs, as well as a 10 percent margin providing a return to Perrigo on its initial investment.

Regarding the IRS’ economic substance contention, the Federal Court provided a clear articulation of how these doctrines apply to modern corporate structuring:31

“There must be some real economic substance and purpose to the transactions and structure, and there further must be some indicia that the taxpayer honored that structure.”

The Court then emphasized that if these prerequisites of real economic substance and purpose are met, established case law permits a taxpayer to structure their affairs with both the motive and effect of minimizing taxes:

“If these things are honored, then under any number of cases, it is permissible for the taxpayer to structure things with both the motive and effect of minimizing taxes.”

The red line drawn by the doctrines is that a taxpayer cannot generate an income stream and then construct an "artificial and alternate reality" merely to reach back and assign that income to a tax-free entity:

“Of course, what the taxpayer can’t do is generate an income stream and then construct an artificial and alternate reality to reach back and assign the income to some entity that doesn’t pay taxes. But that didn’t happen here.”

The Court explicitly found that the creation of such an "artificial reality" did not happen in Perrigo's case. The decision highlighted that Perrigo’s global success stemmed from structured operations, designed from a commercial, manufacturing, and regulatory perspective, to be close to the markets it serves. 32  This finding supported the existence of a legitimate business purpose beyond mere tax avoidance.

Furthermore, regarding economic substance, the Court concluded based on trial evidence that Perrigo U.S. transferred substantial risks associated with acquiring and distributing generic drugs for the U.S. market to its foreign subsidiaries. Crucially, the Court found Perrigo empowered these subsidiaries to bear those risks financially. By taking on genuine commercial risk, the foreign subsidiaries demonstrated the necessary economic substance to defeat the IRS's "sham" claims.

The Judge’s Transfer Pricing Analysis

The Court rejected EY's cost-plus method but generally accepted Perrigo’s expert testimony from Dr. Daniel Frisch, who used a discounted cash flow (DCF) method to generate a lump-sum net present value, which he converted into a sales-based equivalent royalty rate. The key disagreements of Perrigo’s and the IRS’ experts regarding the application of the DCF methodology are three categories of inputs: (1) the date the assignment is deemed to have occurred (2006 for Perrigo whereas 2008 for the IRS); (2) the use of 2007 financial projections (Perrigo’s position) instead of the actual results (the IRS’ position) to determine (a) cash flow and (b) the percentage of sales used to reimburse Perrigo USA for its distribution related expenses; and (3) the application of a differential discount rate (Perrigo’s position) to convert the lump-sum DCF value into an equivalent royalty rate.33

The Court stated unequivocally that, under the arm’s-length standard of the Section 482 regulations, it is vital to cling, where possible, to an ex-ante perspective.34This holding is central to Perrigo walking away with a substantially decreased tax bill (for which Perrigo is seeking a refund in this case). Yet, the Court made two modifications to Dr. Frisch’s analysis suggested by the IRS’ expert, Dr. DeRamus, but otherwise rejected the IRS’ proposed DCF methodology. The primary modification was to accept the IRS’ position against using a differential discount rate; the Court applied a single 10 percent discount rate.35Also, the Court applied a five percent rate to Perrigo USA’s reimbursable distribution costs.36

My Crystal Ball of the Appellate Horizon

This decision represents a significant defeat for the IRS's ongoing campaign to use the economic substance doctrine to ignore related-party transactions. The viability of this IRS strategy may depend on the specific federal appellate districts involved.

The next dice roll decides whether the Sixth Circuit Court of Appeals, which has jurisdiction over the Michigan Federal District Courts, will uphold the Trial Court regarding the dispensing of the IRS’ economic substance arguments. The Federal Court Judge was quite thorough in explaining the generics and OTC pharma sector Perrigo operated in, Perrigo’s risks during 2005 through 2007, the transfer of those risks to the overseas operations, and the business / financial operational substance overseas to support Perrigo’s global expansion.

Based on my research of Sixth Circuit economic substance cases, I think that the Sixth Circuit will uphold the Trial Court based on a textual reading of the statute, the statute’s legislative history, and a 2017 Sixth Circuit holding. Starting with the 2017 decision, the Sixth Circuit explicitly ruled in Summa Holdings, Inc. v. Comm'r,37that the substance-over-form doctrine could not be used to recharacterize transactions based on the tax-minimizing motive (between a domestic international sales corporation (DISC) and Roth IRAs). Perrigo's structuring does not resemble a pure tax scheme like in Summa. Thus, I give Perrigo the house-odds, believing the IRS within the Sixth Circuit will suffer a significant setback regarding its use of economic substance challenges.

From a legislative history analysis, the Sixth Circuit may consider the Joint Committee of Taxation (the ‘JCT’) technical explanation to members of Congress of the proposed 2010 codification, including a non-exhaustive list of inapplicable transactions.38The JCT stated:

“The provision is not intended to alter the tax treatment of certain basic business transactions that, under longstanding judicial and administrative practice are respected, merely because the choice between meaningful economic alternatives is largely or entirely based on comparative tax advantages.”

The JCT, based on its case law research, provided the following illustrative examples of nonapplicable transactions, of which two (in italics) concern Perrigo’s transactions:39

1. A U.S. taxpayer's foreign investment choice via a foreign or domestic corporation.
2. Related-party entity transactions if the arm’s length standard is satisfied.
3. Choosing between debt and equity to capitalize a business.
4. A corporate organization or reorganization transaction.

Even the IRS, in its initial guidance concerning the scope of economic substance codification, stated that:40

“If authorities, prior to the enactment of section 7701(o), provided that the economic substance doctrine was not relevant to whether certain tax benefits are allowable, the IRS will continue to take the position that the economic substance doctrine is not relevant to whether those tax benefits are allowable.”

The Fifth Circuit, where I reside (the circuit includes the state of Texas), applies a multi-factor test to a transaction; each factor must be satisfied.41 First, a transaction must be compelled by business or regulatory realities. Second, the transaction must be ‘imbued with tax-independent considerations’.42 Finally, the transaction must not be shaped totally by tax-avoidance features. Importantly, these factors are phrased in the conjunctive, meaning that the absence of any one of them will render the transaction void for tax purposes. However, the Fifth Circuit has not yet addressed the codified relevancy threshold. It soon will.

The Tax Court unanimously (in a ‘reviewed’ decision Patel v. Comm'r, 17 judges signed onto the opinion written by the 18th) concluded most recently (November 12, 2025) that the economic substance doctrine, as codified, before it can be applied by the IRS, requires a relevancy determination.43The statute states:44

“(1) Application of Doctrine

In the case of any transaction to which the economic substance doctrine is relevant …”.

The statute states, regarding the determination of relevancy: “The determination of whether the economic substance doctrine is relevant to a transaction shall be made in the same manner as if this subsection had never been enacted.”45The Tax Court discerned that Congress intended the relevancy question to hinge on “the existing application” of the economic substance doctrine as developed over the last 90 years.46The Tax Court, relying on the statute’s legislative history, confirmed for taxpayers that “the codified economic substance doctrine is not intended to apply to every transaction.”47The IRS must appeal this decision to the Fifth Circuit. The Fifth Circuit has traditionally been textually friendly regarding tax statutes, which bodes well for upholding the Tax Court.

Note that, pre-codification, the Tax Court observed:48“The doctrine of economic substance becomes applicable, and a judicial remedy is warranted, where a taxpayer seeks to claim tax benefits, unintended by Congress, by means of transactions that serve no economic purpose other than tax savings.”49

However, a Colorado federal court decision Liberty Glob. v. U.S pending in the Tenth Circuit holds the opposite: that, under the codification language and its understanding of the same legislative history referenced above, the IRS is not required to undertake a threshold relevance inquiry.50Rather, the Colorado Federal Court held that the doctrine's relevance is coextensive with the statute's economic substance test.51The Federal Court justified its position based on a 2013 Tenth Circuit decision Blum v. Comm'r.52 In Blum v. Comm'r, the Tenth Circuit states:

"The doctrinal framework is fairly straightforward. Courts must ask two questions: (1) what was the taxpayer's 'subjective business motivation,' and (2) did the transaction have objective economic substance?”53

However, Blum v. Comm'r addresses an economic substance doctrine analysis of a 1998 tax shelter transaction that occurred 12 years before Congress codified the relevance enquiry to determine whether the doctrine applies to a particular transaction. The taxpayer argued, based on a 1990 Tenth Circuit holding, that the Tenth Circuit previously held the economic substance doctrine required a unitary analysis of both questions together.54But the Blum v. Comm'r Tenth Circuit held that a two-prong analysis of each question independently, derived from a 2010 Tenth Circuit decision,55was an “obvious extension of the underlying doctrine”.56

The Tenth Circuit in Liberty Global, may rely on misguided statutory interpretation to dismiss the statute’s term ‘relevant’57 as superfluous, allowing, tautologously, the doctrine’s two-prong analysis to be applied to then determine whether the doctrine is relevant to the transaction. Such a decision will cause a split among the Appellate Circuits (if I am correct that the Sixth and Fifth Circuits will hold that Congress intended for a relevancy threshold to be met before the doctrine applied). Such a split will make Liberty Global ripe for the Supreme Court’s textualist majority to weigh in.

As an example of another circuit’s perspective, the Eleventh held in UPS v. Comm’r that a related party transaction had a legitimate business purpose and real economic effects because it involved genuine, enforceable obligations between independent entities, even if tax avoidance was a motive.58If Perrigo was in the Eleventh Circuit, it would be relevant that the District Court found Perrigo’s Israel entity and its UK finance subsidiary to have taken on substantial business risk in relation to the independent Israeli joint venture partner Dexcel.

In conclusion (at least as I forecast above until the Supreme Court weighs in, if the Tenth Circuit supports the IRS position in Liberty Global), the IRS’ must find a friendly circuit, perhaps the Ninth, if it intends to continue arguing the application of the economic substance doctrine to transfer pricing controversy. It appears from my brief analysis of the Appellate Circuits that the house odds are against the IRS if this was craps.

• 1Perrigo v. U.S., 1:17-cv-00737, 2007 U.S. Dist. LEXIS 120008 (U.S. Dist. Ct, W. Mich., Sept. 25, 2025).
• 2See Federal Judicial Center profile at https://www.fjc.gov/history/judges/jonker-robert-james.
• 3For example, I briefly researched his judicial record of the past five years and did not read any glaring bias pro or against government attorneys.
• 4The IP sale was by Elan, a NYSE-listed company, before Perrigo acquired it. The sale price was $3.25 billion, with annual royalty payments ranging from 18 percent to 25 percent on global net sales, effective as of 2014.  Perrigo, a NYSE-listed company, acquired and merged with Elan in an inversion transaction completed on December 18, 2013, to redomicile its tax residency from the USA to Ireland.
• 5Perrigo 10-K (2018) at 3. Perrigo Resolves Irish Tax Assessment for €297 million, Press Release (Sept. 29, 2021). Available at https://investor.perrigo.com/2021-09-29-Perrigo-Resolves-Irish-Tax-Assessment-for-EUR297-million. Apple’s assessment resulted from the EU Commission, not the Irish Revenue Authority.
• 6Perrigo Tax Shocker Couldn’t Come at Worse Time, Charley Grant, WSJ (Dec. 21, 2018).
• 7Perrigo - 34 Year Dividend History, Macrotrends, available at https://www.macrotrends.net/stocks/charts/PRGO/perrigo/stock-price-history.
• 8See Perrigo Financial Statements 2009-2025, Macrotrends, available at https://www.macrotrends.net/stocks/charts/PRGO/perrigo/financial-statements.
• 9Perrigo Co. PLC, Form 10-Q, April 1, 2023, Note 18, p. 31. Available at https://www.sec.gov/Archives/edgar/data/1585364/000158536423000058/prgo-20230401.htm.
• 10Perrigo - 20 Year Dividend History, Macrotrends, available at https://www.macrotrends.net/stocks/charts/PRGO/perrigo/dividend-yield-history. See also, Perrigo 10-K (2019). Perrigo recorded an effective income tax rate of 54.9 percent in 2018 and 57.3 percent in 2017, versus 17.2 percent in 2016.
• 11This shareholder suit differs from the shareholder suit arising from securities fraud allegations based on Perrigo’s board ‘convincing’ its shareholders to reject a $ 232.23-per-share acquisition offer from Mylan in April 2015. That suit settled in 2024 for $97 million. Mylan instead merged with Upjohn to form the renamed entity Viatris.
• 12Perrigo 10-K (2019) at 123.
• 13Perrigo Resolves Irish Tax Assessment for €297 million, Press Release (Sept. 29, 2021). Available at https://investor.perrigo.com/2021-09-29-Perrigo-Resolves-Irish-Tax-Assessment-for-EUR297-million.
• 14Perrigo Co. v. U.S., 2007 U.S. Dist. LEXIS 120008 (U.S. Dist. Ct, W. Mich., Sept. 25, 2025).
• 15Perrigo divested from its generics prescription business in 2021 to Altaris Capital Partners, LLC for $1.55 billion in order to become a pure-play consumer self-care company. See Perrigo Completes Divestiture Of Generic Rx Business For $1.55 Billion, Press Release, July 6, 2021, available at https://investor.perrigo.com/2021-07-06-Perrigo-Completes-Divestiture-Of-Generic-Rx-Business-For-1-55-Billion.
• 16Patents expire after 20 years from issuance. However, pharmaceutical innovators seek patent protection early in a drug's development, generally before seeking FDA approval. See Final Report on Cost of Generic Drug Development and Approval, contracted to Eastern Research Group by U.S. HHS, filed Dec. 31, 2021, at 1. Available at https://aspe.hhs.gov/sites/default/files/documents/20e14b66420440b9e726c61d281cc5a5/cost-of-generic-drugs-erg.pdf.
• 17Perrigo Co. v. United States, 2007 U.S. Dist. LEXIS 120008, *5.
• 18Perrigo v. U.S., 1:17-cv-00737 (U.S. Dist. Ct, W. Mich., Sept. 25, 2025) at 3. Note that in 2024 Perrigo’s operating margin was 2.6 percent versus a 16.9 percent average for the major pharmaceutical preparation industry players. See Major Pharmaceutical Preparation Industry, CSI Market, available at https://csimarket.com/Industry/industry_Profitability_Ratios.php?ind=803.
• 19Perrigo v. U.S., 1:17-cv-00737 (U.S. Dist. Ct, W. Mich., Sept. 25, 2025) at 8.
• 20Perrigo v. U.S., 2007 U.S. Dist. LEXIS 120008, *6, *95.
• 21Gregory v. Helvering, 293 U.S. 465, 469, 55 S. Ct. 266, 267, 1935 U.S. LEXIS 4, *7.
• 22Perrigo v. U.S., 1:17-cv-00737 (U.S. Dist. Ct, W. Mich., Sept. 25, 2025) at 76-77.
• 23Perrigo v. U.S., 2007 U.S. Dist. LEXIS 120008 (U.S. Dist. Ct, W. Mich., Sept. 25, 2025) *122, 1:17-cv-00737 at 77.
• 24Perrigo v. U.S., 1:17-cv-00737 (U.S. Dist. Ct, W. Mich., Sept. 25, 2025) at 100. This aspect of the decision coincidentally aligns with the recent Facebook decision of Facebook, Inc. v. Comm’r, 2025 U.S. Tax Ct. LEXIS 1295, 164 T.C. No. 9 (May 22, 2025).
• 25To be approved by FDA, the generic version must deliver the same amount of active ingredients into a patient's bloodstream in the same amount of time as the innovator drug. See Abbreviated New Drug Application (ANDA), U.S. FDA, available at https://www.fda.gov/drugs/types-applications/abbreviated-new-drug-application-anda.
• 26Perrigo and Drexel’s partnership included an initial $500,000 patent litigation cap for Perrigo which was increased to $750,000 to fend off AstraZeneca.
• 27See Generic Drug User Fee Rates for Fiscal Year 2026, Docket No. FDA-2025-N-2248, 90 FR 35877 (July 30, 2025). See also Final Report on Cost of Generic Drug Development and Approval, contracted to Eastern Research Group by U.S. HHS, filed Dec. 31, 2021. Available at https://aspe.hhs.gov/sites/default/files/documents/20e14b66420440b9e726c61d281cc5a5/cost-of-generic-drugs-erg.pdf.
• 28Perrigo v. U.S., 1:17-cv-00737 (U.S. Dist. Ct, W. Mich., Sept. 25, 2025) at 22.
• 29Perrigo v. U.S., 1:17-cv-00737 (U.S. Dist. Ct, W. Mich., Sept. 25, 2025) at 43.
• 30Perrigo v. U.S., 1:17-cv-00737 (U.S. Dist. Ct, W. Mich., Sept. 25, 2025) at 52.
• 31Perrigo v. U.S., 1:17-cv-00737 (U.S. Dist. Ct, W. Mich., Sept. 25, 2025) at 63.
• 32Perrigo v. U.S., 2007 U.S. Dist. LEXIS 120008 (U.S. Dist. Ct, W. Mich., Sept. 25, 2025) *107, 1:17-cv-00737 at 69.
• 33Perrigo v. U.S., 2007 U.S. Dist. LEXIS 120008, *123-124.
• 34Perrigo v. U.S., 2007 U.S. Dist. LEXIS 120008, *150.
• 35Perrigo v. U.S., 2007 U.S. Dist. LEXIS 120008, *168.
• 36Perrigo v. U.S., 2007 U.S. Dist. LEXIS 120008, *210.
• 37Summa Holdings, Inc. v. Comm'r, 848 F.3d 779, 2017 U.S. App. LEXIS 2713.
• 38JCX-18-10 (March 21, 2010).
• 39JCX-18-10, 152-153 (March 21, 2010).
• 40Notice 10-62, B. (2010) at 5.
• 41Salty Brine I, Ltd. v. United States, 761 F.3d 484, 494; 2014 U.S. App. LEXIS 14854, *23; Klamath Strategic Inv. Fund v. United States, 568 F.3d 537, 2009 U.S. App. LEXIS 10456.
• 42Salty Brine I, Ltd. v. United States, 761 F.3d 484, 494; 2014 U.S. App. LEXIS 14854, *23.
• 43Patel v. Comm'r, 2025 U.S. Tax Ct. LEXIS 2729, *24; 165 T.C. No. 10.
• 44I.R.C. § 7701(o)(1).
• 45I.R.C. § 7701(o)(5)(c). The IRS quotes this section in its Interim Guidance under the Codification of the Economic Substance Doctrine, Notice 10-62 (2010).
• 46Patel v. Comm'r, 2025 U.S. Tax Ct. LEXIS 2729, *26-27, 165 T.C. No. 10.
• 47Patel v. Comm'r, 2025 U.S. Tax Ct. LEXIS 2729, *26, 165 T.C. No. 10.
• 48ACM Pshp. v. Comm’r, 1997 Tax Ct. Memo LEXIS 118, *104.
• 49  Liberty Glob., Inc. v. U.S., 2023 U.S. Dist. LEXIS 209613, *11.
• 50Liberty Global v. U.S., 2023 U.S. Dist. LEXIS 209613, *10-11.
• 51Liberty Global v. United States, 2023 U.S. Dist. LEXIS 209613, *11.
• 52Blum v. Comm'r, 737 F.3d 1303; 2013 U.S. App. LEXIS 25080.
• 53Blum v. Comm'r, 737 F.3d 1303, 1309; 2013 U.S. App. LEXIS 25080, *10-11.
• 54James v. Comm'r, 899 F.2d 905, 1990 U.S. App. LEXIS 4285.
• 55Sala v. U.S., 613 F.3d 1249, 1253; 2010 U.S. App. LEXIS 15232, *11.
• 56Blum v. Comm'r, 737 F.3d 1303, 1310, 2013 U.S. App. LEXIS 25080, *13.
• 57I.R.C. § 7701(o)(1).
• 58UPS v. Comm’r, 254 F.3d 1014, 1018, 2001 U.S. App. LEXIS 13926, *8.