Officials for Medco Health Solutions have said that the pharmacy benefit manager has agreed in principle with the Department of Justice to settle fraud allegations, although the agreement is not final and nonfinancial terms remain undetermined, the Wall Street Journal reports. Medco officials said that the company would take a pretax charge of $163 million to cover the settlement and related legal costs. The allegations, which involve mail-order prescriptions provided to members of the Federal Employees Health Benefits Program, include most of a complaint filed by two former company employees under the False Claims Act. According to the complaint, Medco canceled prescriptions, switched prescriptions without physician consent, did not fill prescriptions completely and failed to inform physicians about adverse medication interactions. In addition, DOJ alleges that Medco paid illegal kickbacks to large clients in exchange for their business. Medco, which has denied any wrongdoing, said that "we have every expectation that the final agreement will include no admission of liability or wrongdoing," adding that a settlement makes "good business sense" and that "it is time to move on." According to the Journal, a settlement would "remove a major cloud from Medco's future" because, without an agreement, the company faces a "high-profile courtroom trial against the government in June" (Martinez, Wall Street Journal, 5/6).

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