News & Analysis as of May 1, 2025

Internal Revenue Service

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Tax Bytes: Week of March 24, 2025

Eversheds Sutherland (US) LLP on 3/27/2025

Tax developments - Actavis and deductible expenses - On March 21, 2025, the Court of Appeals for the Federal Circuit released a decision in Actavis Laboratories FL, Inc. v. United States, holding that taxpayers could...more

A Recent Tax Ruling Has Made ANDA Litigation Less Burdensome for Generics

Fenwick & West LLP on 3/25/2025

In Actavis v. U.S., a case at the intersection of tax law and patent law, the Federal Circuit held that generic drug companies’ Hatch-Waxman litigation expenses are “ordinary and necessary business expenses” and can be...more

Third Circuit Rejects IRS Assertion That Generic Manufacturers Must Capitalize Legal Fees Incurred in Hatch-Waxman Litigation

Dechert LLP on 8/2/2023

Although legal fees spent preparing Paragraph IV notice letters must be capitalized (and thus amortized over 15 years), legal fees spent defending ANDA suits launched in response to those letters may be taken as deductions in...more

Third Circuit holds patent infringement fees do not facilitate ANDA approval

Eversheds Sutherland (US) LLP on 8/1/2023

In an opinion released July 27, 2023, the Third Circuit affirmed a 2021 Tax Court decision upholding a pharmaceutical company’s immediate deduction of patent defense litigation costs in suits brought under the Hatch-Waxman...more

Hatch-Waxman Litigation Costs Both Capital Expenditures And Ordinary Business Expenses

Tarter Krinsky & Drogin LLP on 5/19/2021

Under the Internal Revenue Code (“Code”) Section 162, ordinary and necessary business expenses are deductible, but Code Section 263 disallows a deduction for capital expenditures (“no deduction shall be allowed” for a capital...more

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