AS I SEE IT...

All for the LOVE of Money...

Accounting Practices, and Profit:
A Nation’s Health Held Hostage
All For the Love of Money
By L. G. Tabor
Freelance Reporter
April 17th, 2005

In 2004, Americans found themselves facing possible serious health risk and death, because of a shortage of flu vaccine. The problems are much larger, darker, and far reaching than it appears to be on the surface. Manufacturing vaccines is big business, and is regulated by numerous organizations, including the SEC (Securities and Exchange Commission), the FDA (Food and Drug Administration), as well as the DHHS (Department of Health and Human Services), the CDC (Centers for Disease Control), and various other Federal and State Health Departments.

In an April 16th, 2005 article in the Washing Post, David Brown, reports that three of the four companies that manufactures vaccines for childhood diseases will no longer sale their vaccines to the American government. In 1993, Congress created the Pediatric Vaccine Stockpile. Stockpiling vaccine is in the best interest of our country, but new accounting guidelines that will require vaccine manufacturers to delay booking production payments as revenue until the drugs are removed from the stock pile for use is creating a real threat to our Nation’s health infrastructure, and since the Pediatric Vaccine Stockpile was created our government has tapped the stockpile nine times. Vaccine inventories are carefully managed, and replenished to avoid loss due to approaching expiration dates by the manufacturers.

The major vaccine manufactures, Aventis of Strasbourg, France, GlaxoSmithKline of London, Merck & Co. Inc. of Whitehouse Station, N.J, and Wyeth of Madison, N.J. are all publicly traded, and are being told by their Auditors that accounting rules imposed by the SEC will no longer allow the payments for vaccines to be counted as revenues until the vaccines are actually taken out of the Pediatric Vaccine Stockpile for use. Although, the manufactures still have the cash in hand, delays imposed by the SEC in counting the cash as revenue will have a direct and immediate impact on their profits. Profits, which are measured, and calculated to attract investors, and the SEC’s position will have a detrimental impact on what investors consider most important – earnings per share.

The drug manufactures are not accused of any wrongdoing. No one at the SEC is saying anything beyond the officially published, concisely worded materials about revenue reporting requirements. The most alarming issue is that neither the American government, nor company officials appear to have a clue how to resolve the serious problems that have been created by the SEC position on reporting revenue.