NEW YORK, July 12, 2002 (PRIMEZONE) -- Kaplan Fox (kaplanfox.com) has filed a class action suit against Merck & Co., Inc. ("Merck" or the "Company") (NYSE:MRK) and certain of its officers and directors, in the United States District Court for the District of New Jersey. This suit is brought on behalf of all persons or entities who purchased or otherwise acquired Merck common stock between July 1, 1999 and June 21, 2002, inclusive (the "Class Period").
The complaint alleges that Merck and certain of its officers and directors violated the federal securities laws. The complaint alleges, among other things, that during the Class Period defendants overstated Merck's revenues. The Company's operations are comprised of two reportable segments: Merck Pharmaceutical and Merck's wholly owned subsidiary, Merck-Medco Managed Care, L.L.C. ("Merck-Medco"). Since Merck acquired Merck-Medco in 1993 and throughout the Class Period, Merck and Merck-Medco have falsely inflated their reported revenues by billions of dollars, in violation of Generally Accepted Accounting Principles ("GAAP"). During the Class Period, Merck-Medco's revenues have made up over 50% of Merck's total revenues. Merck-Medco revenues are purportedly derived from the filling and managing prescriptions and health management programs. Consumers who are members of pharmacy benefits plans and purchase prescriptions must make a co-payment directly to the pharmacy. To artificially boost Merck-Medco's apparent sales, defendants included consumer co-payments for prescription drugs in its revenues, contrary to the revenue recognition practices of two of Merck-Medco's biggest competitors and in violation of GAAP. As a result, Merck-Medco and Merck overstated the companies' total economic activity, making it look more successful than it was in reality.
According to a June 21, 2002 article in The Wall Street Journal, neither company bills for the co-payments, gets billed for them, or otherwise comes into contact with them. The Wall Street Journal reported that Merck has not disclosed the actual co-payments charged and estimated that Merck and Merck-Medco may have artificially inflated their 2001 revenues by as much as $4.6 billion.
As a result of Defendants' false and misleading statements, investors were damaged, by purchasing Merck's common stock at artificially inflated levels during the Class Period.
Plaintiff seeks to recover damages on behalf of the Class and is represented by Kaplan Fox & Kilsheimer LLP. Our firm, with offices in New York, San Francisco, Chicago and New Jersey, has many years of experience prosecuting investor class actions and actions involving financial fraud. For more information about Kaplan Fox & Kilsheimer LLP, you may visit our website at www.kaplanfox.com
If you are a member of the Class, you may move the court no later than August 30, 2002 to serve as a lead plaintiff for the Class. In order to serve as a lead plaintiff, you must meet certain legal requirements.
If you have any questions about this Notice, the action, your rights, or your interests, please e-mail us at mail@kaplanfox.com or contact:
Frederic S. Fox, Esq. Joel B. Strauss, Esq. Donald R. Hall, Esq. Kaplan Fox & Kilsheimer LLP 805 Third Avenue, 22nd Floor New York, NY 10022 (800) 290-1952 (212) 687-1980 Fax: (212) 687-7714 E-mail address: mail@kaplanfox.com William J. Pinilis 237 South Street Morristown, NJ 07962 (973) 656-0222 Fax: (973) 401-1114 E-mail address: mail@kaplanfox.com Laurence D. King, Esq. Kaplan Fox & Kilsheimer LLP 601 Montgomery Street San Francisco, CA 94111 (415) 772-4700 Fax: (415) 772-4707 E-mail address: mail@kaplanfox.com
More information on this and other class actions can be found on the Class Action Newsline at www.primezone.com/ca