Company: SRPT
Filing Date: 2025-02-28
Form Type: 10-K
Source: 0000950170-25-029973
Chunk: 302

Company: Sarepta Therapeutics, Inc.
Filing Date: 2025-02-28
Form: 10-K
Item: Item 1
Chunk 302
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 arrangements the Company enters into with payors that provide for privately-negotiated rebates. Rebate reserves are recorded in the same period the related revenue is recognized, resulting in a reduction of product revenue and the establishment of a liability which is included in accrued expenses. oChargebacks, including Public Health Services (“PHS”) chargebacks, relate to the Company’s estimated obligations resulting from contractual commitments to sell products to qualified healthcare providers at prices lower than the list prices that the Company charges to wholesalers. The wholesaler charges the Company for the difference between what the wholesaler pays for the products and the ultimate selling price to the qualified healthcare providers. Chargeback reserves are recorded in the same period the related revenue is recognized, resulting in a reduction of product revenue and accounts receivable. Chargeback amounts are generally determined at the time of resale to the qualified healthcare provider from the wholesaler, and the Company generally issues credits for such amounts within a few weeks of receiving notification of resale from the wholesaler.•Distribution fees: relating to fees paid to customers in the distribution channel that provide the Company with inventory management, data and distribution services and are generally accounted for as a reduction of revenue. To the extent that the services received are distinct from the Company’s sale of products to the customers, these payments are accounted for as selling, general and administrative expenses. Reserves for distribution fees result in an increase in a liability if payments are required of the Company or a reduction of accounts receivable if no payments are required of the Company. •Prompt payment discounts: relating to the Company’s estimated obligations for credits to be granted to specialty pharmacies for remitting payment on their purchases within established incentive periods. Reserves for prompt payment discounts are recorded in the same period the related revenue is recognized, resulting in a reduction of product revenue and accounts receivable.•Patient assistance: relating to financial assistance programs provided to qualified patients. Reserves for costs related to patient assistance programs are recorded in the same period the related revenue is recognized, resulting in a reduction of product revenue and the establishment of a liability which is included in accrued expenses.•Return reserves: relating to the limited return rights the Company provides to customers. The Company records product return reserve, if appropriate, as a reduction of revenue at the time product sales are recorded. Several factors are considered in determining whether return reserves are required, including the patient population and the customers’ limited return rights. Because of the pricing, the limited number of patients, and the customers’ limited return rights, most customers only carry a limited inventory. Based on these