Pharmacy benefits manager Medco Health Solutions is attempting to discredit a report in today's New York Times that says the company accepted more than $3.5 billion in rebates from pharmaceutical manufacturers to promote the use of expensive, high-profit drugs over a three-year period.
"It's over-the-top reporting," says Jeff Simek, a spokesperson for Franklin Lakes, N.J.-based Medco, a unit of drug giant Merck & Co.
The Times says that it obtained documents under court-ordered seal that show that the PBM, then known as Merck-Medco Managed Care, took in $3.56 billion in rebates from drug-makers in 1997, 1998 and 1999, as incentives for promoting certain medications to physicians.
The story says Merck was especially aggressive in pushing its products to its wholly owned PBM subsidiary. Merck long has maintained that it does exert management authority over Medco.
Simek does not dispute the value of the rebates, but says the Times story is "sensationalistic" because part of the report relies on what Simek calls "old information."
Simek also says the testimony cited is "from people who could hardly be described as credible." He does not elaborate.
The newspaper refers to statements from University of Chicago law professor Daniel Fischel, an expert witness for plaintiffs in a suit against Medco. Fischel was not immediately available for comment.
Medco and several of its competitors have been involved in both civil and criminal cases questioning their rebate policies. In December, Medco agreed to settle the civil litigation for $42.5 million, a deal still awaiting approval from a federal judge in White Plains, N.Y.
"We are continuing to work on the proposed settlement," Simek says.
The Times says it received photocopies of sealed court documents for that case that were "heavily edited at Medco's request" and furnished by "unidentified people who said in a note that they wanted shareholders and Medco plan members to be aware of the information."
This reliance on sealed documents "means somebody broke the law," Simek says.