Medco today settled its ongoing lawsuit with several state attorneys-general at the relatively modest cost of $30m. The stock rose slightly on the news, although there is an another ongoing Federal lawsuit, that TCHB has covered before. While this looks like a kind of business as usual story of “company gests caught with hand in taxpayer cookie jar, company pays fine, stock goes up as investors are happy fine isn’t bigger”, some of my more jaded readers have been poking into the details. Matt Quinn writes about a different Medco settlement with Massachusetts:
- Maybe I’m missing something, but it appears that Medco only had to pay back part of what it stole from the state of Mass:
“Medco Health Solutions will pay Massachusetts $5.5 million to settle allegations that the company cheated the state while it managed prescription drug benefits for nearly 200,000 state employees and retirees, according to documents expected to be filed in US District Court today.”
“Over the course of the contract, Medco passed along about $9 million in rebates, but kept another $10 million, the state alleges.” So, steal $10, pay back $5.5… Not a bad deal.
And, of course, this plot to make Medco millions of dollars was dreamt up and executed by a few “rogue employees”:
“Medco officials have acknowledged that the company had isolated problems with “rogue employees” at a mail-order pharmacy in Tampa, but said those problems were quickly corrected and did not affect drug costs.”
Of course this is nothing to the “business opportunities” those PBMs and their rogue employees will be looking at when they get to run the Medicare drug program after 2006.
I suspect the lawyers, state AGs and the DOJ have jobs for life.