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Medco to pay to settle charges

October 24, 2006|From Bloomberg News

Medco Health Solutions Inc., the biggest manager of employee prescription drug benefits, agreed to pay $155 million to settle U.S. allegations that it accepted kickbacks from drug makers and submitted false claims to the government.

The settlement resolves two civil cases and an investigation by the U.S. attorney's office in Philadelphia, the Justice Department said Monday. The government also accused the company of paying kickbacks to health plans to obtain business.

Medco accepted payments from drug makers to favor their drugs and submitted false claims for mail-order prescription drugs provided to millions of federal employees, retirees and their families, according to the government's complaint. The company promised to abide by the terms of a corporate integrity agreement and won't be barred from government health plans.

Medco, which manages prescription drug benefits for more than 60 million Americans, canceled prescriptions it couldn't fill on time to avoid paying penalties under its federal contract and shorted the number of pills it provided in prescriptions, the government's complaint said.

The company was also accused of sending out drugs other than those prescribed by a physician to earn rebates from drug manufacturers.

There were no findings of wrongdoing against the company, Medco said.

Shares of Medco rose 12 cents to $57.60 on Monday.

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