Drug companies are getting hammered on the world markets after

Merck & Co

(NYSE:MRK) joined the list of companies found to have skewed its results.

Merck is flopping by 10% and counting on Europe's markets, and Israeli drugmakers are getting spattered by fallout.

Teva Pharmaceuticals

(Nasdaq, TASE:TEVA) is down 1.7% on the Tel Aviv Stock Exchange and Agis is losing 2% on relatively high turnover.

Merck booked imaginary revenue totaling $12.4 billion, according to the

Wall Street Journal

(and yes, its accountants were Arthur Andersen).

But Israeli companies are unlikely to have engaged in such shenanigans, says Tel Aviv brokerage IBI. "The entire marketplace is in shock at the expanding circle of companies found to have faulty reporting," said IBI analyst Elah Alkalay.

The heavy selling today of Israeli drug companies may be a result of the Merck mess, but events at the company are totally unrelated to anything in Israel.

Given Teva's unblemished history, and the fact that it's under double supervision by regulators in Israel and in the United States - "the chance of finding any substantial irregularities in Teva's books is very remote. The market is nervous, and anything like this affects it," Alkalay said.

Not only are investors unnerved: in Teva's case they may also be suffering from vertigo, she adds. But there are no fears of accounting misdeeds. The drug companies here book income already received, and have little wiggle room to millions-represent their results, she explained.