Inland Revenue says an Oxfam report claiming pharmaceutical companies in New Zealand are dodging tax by some 21 million dollars completely misrepresents the situation here

And a tax expert agrees - saying Oxfam's study is based on flawed methodology.

PWC's Geoff Nightingale says it's used global profit percentages and applied them to revenue in New Zealand - but drug companies don't have the same activities offshore as they do here.

He says as well, Pharmac drives down margins through bulk government purchasing.

Geoff Nightingale says New Zealand's done an enormous amount of work in the last few years tightening up on multi-nationals, and that kind of tax gap is pretty unlikely.