In September 2009, Merck & Co. Inc. announced that they will be the largest drug company to publish details of payments to doctors. The prescription drug industry has met with growing criticism about its lack of disclosure regarding payments that may influence drug prescribing. As the second-largest U.S. drug company, the company vowed to begin publishing regular details in the fourth quarter of 2009.
- Based on the dollar amounts listed in the article, why aren’t these listing currently part of GAAP accounting disclosures to the financial statements?
- What financial statement(s) would contain these payments?
- How do you think these payments are classified (i.e., what account title)?
Jack, A. (2009). Merck to Publish GP Payments. FT.com (Retrievable online at http://www.ft.com/cms/s/0/3f2d7e48-a8a3-11de-9242-00144feabdc0.html?ftcamp=rss&nclick_check=1)