Updated from 7:17 AM EDT
Shares of pharmaceutical giant
were falling in preopen trading on a news report that it booked $12 billion in revenue from a pharmacy-benefits unit that it never collected.
The Wall Street Journal
reported that the revenue from Medco was booked over the past three years. Medco's revenue included co-payments collected by pharmacies, even though the unit doesn't receive the co-payments, the
The paper said that regulators don't appear to have any problems with the way the revenue is handled. Merck says that the numbers conform to GAAP principles, and that it has no effect on its net income because it subtracts the same amount as an expense.
Merck shares closed down $1.05, or 2.15%, to $47.81.