US says Medco to pay $155 million in kickback case
By Peter Kaplan
Reuters
October 24, 2006
To read the press release from the U.S. Department of Justice, click here.
Pharmacy benefits manager Medco Health Solutions (MHS.N: Quote, Profile, Research) will pay $155 million plus interest to settle government charges of kickbacks and false claims, the U.S. Justice Department said on Monday.
Medco, the second largest U.S. pharmacy benefits manager, resolved the department's civil charges that the company submitted false claims for mail order prescription drug services it had contracted to provide to millions of federal employees and retirees.
"Hidden financial agreements with drug manufacturers and health plans can influence which drugs patients receive, the price we all pay for drugs, and whether pharmacists serve patients with their undivided professional judgment," Assistant Attorney General Peter Keisler said in a statement.
The government also charged that Medco violated an anti-kickback law by soliciting and accepting payments from drug makers to favor their products on Medco's published list of drugs, and by paying kickbacks to get health plans to award contracts to provide the mail order pharmacy benefits.
Medco said the settlement was a business decision and contained no finding of wrongdoing against the company.
"Even though we did nothing wrong, for our company and our clients it is the right decision to put these aged matters in the past," Medco said in a statement.
The Justice Department also said Medco cancelled valid prescriptions it could not fill in time to avoid paying penalties under its contract; shorted pills from filled prescriptions; failed to do reviews needed to identify potential adverse drug interactions; and used drugs other than those prescribed by the physician to earn undisclosed rebates from drug manufacturers.
The settlement stemmed from two whistle-blower cases filed in 1999 and 2000 against the New Jersey-based Medco, the Justice Department said.
