TRENTON, N.J. – Drugmaker Merck & Co. said Friday the federal health care overhaul will reduce its revenue by about $170 million this year, and by roughly double that amount next year.

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.

Merck said 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. In 2011, the company said it expects “unfavorable sales impact” of about $300 million to $350 million.

Despite those costs, Merck said that it is still aiming to produce compound annual growth in the high single digits.


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