Here’s what Medco said in its IPO offering document last April:
In February 2000, two qui tam, or whistleblower, complaints under the Federal False Claims Act and similar state laws were filed under seal in the United States District Court for the Eastern District of Pennsylvania. These
complaints allege improper pharmacy practices, violations of state pharmacy laws and inappropriate therapeutic interchanges. We have not been served with the complaints and have not been required to defend against the allegations.
Well now that the US Attorney is joining the suit, it appears that the "practices" included
"Inappropriately filled prescriptions includ(ing) instances where a Medco pharmacist said he consulted a doctor but didn’t, or when a prescription was canceled suspiciously". The stock market doesn’t seem to care, based on the fact that the existence of the suit was disclosed in the S1. However, the US Attorney is being very aggressive claiming that the government can charge $5000 for each script that was affected, and that there are thousands and thousands. It’s worth keeping an eye on this one as PBMs may find their future in whatever comes out of the Medicare Drug Coverage bill is affected by this publicity–whether or not Medco is found guilty and fined a huge sum.