Merck's $12.4bln in fake revenues ok with regulators

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Merck records $12.4bln sales it never collected-report (MRK) By Allen Wan
Merck & Co. (MRK) recorded $12.4 billion in revenue from its
pharmacy-benefits unit Medco over the past three years that the subsidiary
never collected, the Wall Street Journal reported in its online edition
Monday, citing the drug giant's latest SEC filing. Medco included as part of
its revenue the co-payments collected by pharmacies from patients, even
though it doesn't receive those funds. Between 1999 and 2001, the
co-payments represented nearly 10 percent of Merck's overall revenue, the
report said. Merck said that its revenue-recognition policy conforms to GAAP
principles. There aren't any indications that regulators have any problems
with Merck's or Medco's accounting, the report said. Shares of Merck ended
at $48.86 on Friday.

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