Re:
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PharMerica Corporation
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Form 10-K for the Year Ended December 31, 2014
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Filed March 2, 2015
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Form 10-Q for the Quarter Ended September 30, 2015
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Filed November 6, 2015
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Response letter dated December 8, 2015
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File No. 001-33380
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· | the Company is responsible for the adequacy and accuracy of the disclosure in the filings; |
· | staff comments or changes to disclosure in response to staff comments do not foreclose the Commission from taking any action with respect to the filings; and |
· | the Company may not assert staff comments as a defense in any proceeding initiated by the Commission or any person under the federal securities laws of the United States. |
1. | We note your response to comment 1 from our letter dated November 24, 2015 and understand that the $71.5 million receivable that you have recorded as of September 30, 2015 is comprised of various rebates that you recognized under the terms of the Amended PVA with ABDC prior to the date the agreement was terminated, April 1, 2015. Please tell us how you considered the uncertainty of collection of these receivables in determining that an allowance was not necessary as of the balance sheet date. Your analysis should address how you assessed both probability of loss and whether the loss was reasonably estimable under ASC 450-20-25. Please refer to ASC paragraphs 310-10-35-7 through 11 and ASC Subtopic 450-20. |
2. | Your disclosure states that you have included the net receivable in “other assets” as of September 30, 2015. Please clarify whether you have classified the net receivable as a current or non-current other asset. To the extent you have included the receivable as a current asset, please tell us how your classification complies with the definition included in ASC 210-10-20. In this regard, we note that ABDC stopped making payment for the rebates after the first quarter of 2014 and that you believe the litigation with ABDC is likely to continue longer than 12 months. |
3. | We note your response to comment 2 indicates that the Amended PVA with ABDC contained a “no set-off” provision however you also state that through the normal course of business ABDC would issue PharMerica credit memos offsetting amounts, ABDC owed to you. Please further clarify the terms of the no set-off provision and how ABDCs use of credit memos to settle balances was consistent with the terms of the provision. In your response, provide details of the frequency at which these offsets occurred and the nature of the underlying transactions that were settled in this manner. |