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Accounts Receivable, Sales and Allowances
 6 Months Ended
Jun. 30, 2018
Receivables [Abstract]  
Accounts Receivable, Sales and Allowances
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 typical of the pharmaceutical industry and is not necessarily 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 that entitles it to a particular deduction). This process can lead to partial payments to the Company 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 condensed consolidated statements of comprehensive (loss) income. Additionally, with the exception of administrative fees and others, which is included as a current liability, the ending reserve balances are included in trade accounts receivable, net in the Company’s condensed consolidated balance sheets.
 
Trade accounts receivable, net consists of the following (in thousands):
 
June 30,
2018
 
December 31,
2017
Gross accounts receivable
$
375,051

 
$
378,759

Less reserves for:
 
 
 
Chargebacks (1)
(68,289
)
 
(73,984
)
Rebates (1)
(67,766
)
 
(111,945
)
Product returns
(40,737
)
 
(41,687
)
Discounts and allowances
(8,215
)
 
(7,779
)
Advertising and promotions
(2,118
)
 
(1,301
)
Doubtful accounts
(608
)
 
(680
)
Trade accounts receivable, net
$
187,318

 
$
141,383



(1) The reductions in the Chargebacks and Rebates balances as of June 30, 2018 when compared to the December 31, 2017 balance were primarily due to payment timing, product mix, customer mix and lower wholesaler inventory. Additionally, a change in contractual terms with a major customer in the first quarter of 2018 resulted in an increase in chargebacks and a decrease in rebates, which is also a contributing factor in the variances between the two periods compared.

For the three and six month periods ended June 30, 2018 and 2017, the Company recorded the following adjustments to gross sales (in thousands):
 
Three Months Ended
June 30,
 
Six Months Ended
June 30,
 
2018
 
2017
 
2018
 
2017
Gross sales
$
507,819

 
$
567,112

 
$
1,028,352

 
$
1,247,647

Less adjustments for:
 
 
 
 
 
 
 
Chargebacks (1)
(222,482
)
 
(237,275
)
 
(446,445
)
 
(517,437
)
Rebates, administrative and other fees (1)
(75,094
)
 
(109,760
)
 
(167,374
)
 
(234,138
)
Product returns
(6,133
)
 
(8,116
)
 
(13,254
)
 
(16,533
)
Discounts and allowances
(9,946
)
 
(10,830
)
 
(20,183
)
 
(23,752
)
Advertising, promotions and others
(3,220
)
 
(1,991
)
 
(6,089
)
 
(3,227
)
Revenues, net
$
190,944

 
$
199,140

 
$
375,007

 
$
452,560



(1) The decreases in chargebacks and rebates, administrative and other fees for the three and six month periods ended June 30, 2018 as compared to the same periods in 2017, were primarily due to volume declines as well as product mix and customer mix.