Accounts Receivable, Sales and Allowances

12 Months Ended

Dec. 31, 2015

Loans, Notes, Trade and Other Receivables Disclosure [Text Block]

Note 4 — Accounts Receivable, Sales and Allowances

The nature of the Company’s business inherently involves, in the ordinary course, significant amounts and substantial volumes of transactions and estimates relating to allowances for product returns, chargebacks, rebates, doubtful accounts and discounts given to customers. This is a natural circumstance of the pharmaceutical industry and is not specific to the Company. Depending on the product, the end-user customer, the specific terms of national supply contracts and the particular arrangements with the Company’s wholesaler customers, certain rebates, chargebacks and other credits are deducted from the Company’s accounts receivable. The process of claiming these deductions depends on wholesalers reporting to the Company the amount of deductions that were earned under the terms of the respective agreement with the end-user customer (which in turn depends on the specific end-user customer, each having its own pricing arrangement, which entitles it to a particular deduction). This process can lead to partial payments against outstanding invoices as the wholesalers take the claimed deductions at the time of payment.

With the exception of the provision for doubtful accounts, which is reflected as part of selling, general and administrative expense, the provisions for the following customer reserves are reflected as a reduction of revenues in the accompanying consolidated statements of comprehensive income. The ending reserve balances are included in trade accounts receivable, net in the Company’s consolidated balance sheets.

Net trade accounts receivable consists of the following (in thousands):

	December 31,
	2015			2014 (as Restated)
Gross accounts receivable	$	466,570		$	446,925
Less reserves for:
Chargebacks and rebates	(254,440		)	(198,112		)
Product returns	(48,333		)	(44,646		)
Discounts and allowances	(10,079		)	(15,554		)
Advertising and promotions	(1,518		)	(758		)
Doubtful accounts	(1,579		)	(309		)

Trade accounts receivable, net	$	150,621		$	187,545

For the years ended December 31, 2015, 2014 and 2013, the Company recorded the following adjustments to gross sales (in thousands):

	Year ended December 31,
	2015			2014 (as Restated)			2013
Gross sales	$	2,511,693		$	1,433,603		$	528,574
Less adjustments for:
Chargebacks and rebates	(1,361,030		)	(775,964		)	(183,403		)
Product returns	(34,272		)	(20,993		)	(5,001		)
Discounts and allowances	(50,385		)	(30,782		)	(8,464		)
Administrative fees	(71,727		)	(44,558		)	(9,471		)
Advertising, promotions and other	(9,203		)	(6,258		)	(4,524		)

Revenues, net	$	985,076		$	555,048		$	317,711

The annual activity in the Company’s allowance for customer deductions accounts for the three years ended December 31, 2015 is as follows (in thousands):

	Returns			Chargebacks & Rebates			Discounts			Doubtful Accounts			Advert. & Promotions			TOTAL
Balance at December 31, 2012	8,409			13,452			1,362			30			585			23,838
Provision	5,001			183,403			8,464			(5		)	4,524			201,387
Charges processed	(5,246		)	(183,973		)	(8,182		)	—			(4,657		)	(202,058		)

Balance at December 31, 2013	$	8,164		$	12,882		$	1,644		$	25		$	452		$	23,167
Provision (as Restated)	20,993			775,964			30,782			247			6,258			834,246
Additions from acquisitions (as Restated)	35,542			38,500			5,160			51			311			79,564
Charges processed (as Restated)	(20,053		)	(629,234		)	(22,032		)	(14		)	(6,262		)	(677,595		)

Balance at December 31, 2014 (as Restated)	$	44,646		$	198,112		$	15,554		$	309		$	758		$	259,379
Provision	34,272			1,361,030			50,385			840			9,203			1,455,730
Additions from acquisitions	—			—			—			291			—			291
Charges processed	(30,584		)	(1,304,703		)	(55,860		)	140			(8,443		)	(1,399,451		)

Balance at December 31, 2015	$	48,333		$	254,440		$	10,079		$	1,579		$	1,518		$	315,949