By Juliann Walsh
Bloomberg News
Medco Health Solutions Inc., the largest U.S. provider of pharmacy-benefit services, with clients including UnitedHealthcare, has received a federal-government subpoena related to a lawsuit alleging the company sought to defraud the Medicaid and Medicare programs.
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The subpoena from the Department of Health and Human Services’ Office of Inspector General arrived Jan. 21 and seeks certain documents for the case, Franklin Lakes, N.J.-based Medco said in a regulatory filing. The company said it doesn’t know when the federal government will decide whether to join the suit.
The lawsuit accuses Medco of making false claims to the government health programs by reclassifying rebates and discounts on prescription drugs as “data,” “service fees,” or
“educational grants,” the filing said. Medco and its two biggest competitors are the subject of lawsuits or investigations that include state and federal authorities probing business practices in the pharmacy-benefit industry.
Medco, spun off by Merck in August 2003, manages drug benefits for health plans and businesses. Medco said in its filing that the lawsuit, filed previously, also alleges the company
inflated the manufacturer prices it reported to Medicaid and undervalued rebates usually paid to the program. Medicaid is the joint state-federal health-care program for the poor, while
Medicare is the federal plan for the elderly and disabled.
Shares of Medco fell 52 cents, or 1.1 percent, to $45.43 as of 4:16 p.m. in New York Stock Exchange composite trading on Wednesday. The shares have gained 42 percent in the past year.
New York State Attorney General Eliot Spitzer in August sued the third-biggest pharmacy-benefit manager, Express Scripts Inc. Two pharmacists in Florida filed a whistleblower lawsuit against No. 2 Caremark Rx Inc., and the company has received subpoenas from 23 state attorneys general.
Blue Cross & Blue Shield of Rhode Island subscribers’ pharmacy benefits are now managed by PharmaCare, a subsidiary of the CVS Corp. As of July 1, the insurer will be using WellPoint Pharmacy Management.
– With PBN staff reports
