1. Most Discussed
  2. Gainers & Losers

Merck Article (Bloomberg)

  1. Acronym

    730 Posts.

    Link to Article

    07/08 00:49
    Merck Inflated Revenue by $12.4 Bln, Wall Street Journal Says
    By Alan Purkiss

    New York, July 8 (Bloomberg) -- Merck & Co., the second- biggest U.S. drugmaker, recorded $12.4 billion in revenue from its pharmacy-benefits subsidiary during the past three years that the unit never collected, the Wall Street Journal Europe reported, citing a company filing to the Securities and Exchange Commission.

    The Medco unit has included as part of its revenue co- payments collected by pharmacies from patients, though it doesn't receive those funds; Merck disclosed the accounting policy in April, but Friday's SEC filing was the first disclosure of exactly how much revenue is involved, the newspaper said.

    Merck says the policy has no effect on net income, because it subtracts the exact amount as an expense, the Journal reported.

    Merck faces a lawsuit alleging that Medco, which is due to make a $1 billion initial share offer, used improper accounting methods to boost revenue. A federal suit filed in Newark by shareholder Arnold Deutschl claims that the policy on co-payments violates Generally Accepted Accounting Principles, or GAAP.


Before making any financial decisions based on what you read, always consult an advisor or expert.

The HotCopper website is operated by Report Card Pty Ltd. Any information posted on the website has been prepared without taking into account your objectives, financial situation or needs and as such, you should before acting on the information or advice, consider the appropriateness of the information or advice in relation to your objectives, financial situation or needs. Please be aware that any information posted on this site should not be considered to be financial product advice.

From time to time comments aimed at manipulating other investors may appear on these forums. Posters may post overly optimistic or pessimistic comments on particular stocks, in an attempt to influence other investors. It is not possible for management to moderate all posts so some misleading and inaccurate posts may still appear on these forums. If you do have serious concerns with a post or posts you should report a Terms of Use Violation (TOU) on the link above. Unless specifically stated persons posting on this site are NOT investment advisors and do NOT hold the necessary licence, or have any formal training, to give investment advice.


Thank you for visiting HotCopper

We have detected that you are running ad blocking software.

HotCopper relies on revenue generated from advertisers. Kindly disable your ad blocking software to return to the HotCopper website.

I understand, I have disabled my ad blocker. Let me in!

Need help? Click here for support.