Medco Discloses Two New Whistleblower Suits

In May, Medco disclosed it would take a $163 million charge in connection with an expected settlement with the Justice Department concerning previous whistleblower allegations of fraud. The settlement involved allegations that, among other things, Medco inappropriately canceled or changed prescriptions, underfilled pill bottles and took longer to fill prescriptions than it claimed.
In the [8/4/06 release], the company said the settlement is still pending because "non-financial elements" hadn't been agreed upon.
Medco said in the course of negotiating the settlement, it learned of the additional whistleblower actions, one filed in the Eastern District of Pennsylvania and the other filed in the District of New Jersey. Medco said the actions were sealed, and that each action "appears to allege" billing violations.
The Pennsylvania case, Medco said, appears to allege the company billed government payors using invalid or out-of-date national drug codes. The New Jersey case appears to allege that Medco charged government payors a different rate than it reimbursed pharmacies; engaged in duplicate billing; refilled prescriptions too soon; and billed government payors for prescriptions written by unlicensed physicians and physicians with invalid Drug Enforcement Agency authorizations.
Medco said the additional whistleblower actions aren't being considered in the current settlement negotiations with the Justice Department.
Whistleblower suits are filed under the federal False Claims Act, and the filers can win up to a third of any recovery made by the government.
Medco said it didn't know the identity of the filers or any other defendants in the actions.
-By Tony Cooke, Dow Jones Newswires; 202-862-1347; tony.cooke@dowjones.com

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