Why this drugmaker invests in clean coal

Mylan banks on more than just prescription medications to make a profit. The drugmaker has achieved hundreds of millions of dollars in tax credits over the last six years by investing in refined coal, reports Reuters.

Here are four things to know.

  1. Mylan owns a 99 percent stake in five different coal refinery companies. At the refineries, coal is processed to remove harmful pollutants, thereby making the product more environmentally friendly. The refineries then sell it to power plants at a reduced cost. While the process technically loses money, Mylan earns credits through the investment to lower its tax bill, according to the report.

  1. Congress approved refined coal tax credits in 2004 to encourage companies to fund the development of clean coal, according to the report. Mylan is in the minority of public companies — and the only public drugmaker — that uses these tax credits, according to Reuters' review of tax documents filed with the U.S. Securities and Exchange Commission.

  1. The credits — along with an overseas headquarters — allowed Mylan to lower its effective tax rate to 4 percent in 2014 and 7.4 percent in 2015, according to the report.

  1. An unnamed source told Reuters the coal investments have boosted Mylan's net earning by $40 million to $50 million annually for the past two years. This revenue represents 9 percent of the drugmaker's total earnings in 2016 and more than 5 percent of its earnings in 2015.

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