Merck: Health care overhaul to cost drugmaker $320M this year in rebates, lost tax benefit

Merck: Health care overhaul to cost $320M in 2010

WHITEHOUSE STATION, N.J. — Drugmaker Merck & Co. says the federal health care overhaul will reduce its revenue by about $170 million this year, and by roughly double amount that next year.

Merck says rebates to the Medicaid program, required in the recently passed federal health care legislation, will reduce its revenue by about $35 million in the first quarter and $170 million for all of 2010.

Merck also expects to take a non-cash charge of about $150 million for the first quarter, due to elimination of the tax benefit for providing prescription drug coverage to company retirees.

The Whitehouse Station, N.J., company is slated to report its first-quarter results on May 4.