Medco Health Solutions paid tens of millions of dollars to a health plan as a reward for selecting the pharmacy benefits manager to run the prescription drug portion of insurance contracts for federal employees, a prosecutor says, in the latest development in a whistleblower case against the PBM.
In an amended civil complaint filed late Monday, Philadelphia-based U.S. Attorney Patrick Meehan accuses Medco of paying $87.4 million in kickbacks to an unnamed health insurer during the second half of 2001.
Oxford Health Plans, Trumbull, Conn., says it is the health insurance company in question.
The amended complaint, which adds to a suit filed in September, also names two former Medco executives.
Diane Collins of Florida, vice president and general manager of a Medco mail-order pharmacy in Tampa until January 2001, is accused of leading a deliberate effort to destroy and switch high-cost prescriptions as a means of improving pharmacy efficiency. New Jersey resident Robert Blyskal, corporate executive vice president until June 2003, participated in a cover-up of the activities and made misleading statements to federal investigators, according to the suit.
The suit says Blyskal was president of various Medco mail-order facilities "at relevant times."
Medco, based in Franklin Lakes, N.J., and formerly known as Merck-Medco Managed Care, denies the accusations and says in a company statement that it plans on filing a motion to dismiss the complaint by Dec. 30.
According to Meehan, the charges against Blyskal and Collins are related to a contract Medco held with the Blue Cross and Blue Shield Association to provide prescription drug coverage for 4 million federal employees, retirees and their dependants. Blues plans have managed the Federal Employees Health Benefits Program for the Office of Personnel Management since 1987.
The suit says the performance of managers at Medco pharmacies is gauged by the operating costs of each facility and that pharmacists are on a "quota system" known as "maximum quality per hour," a measure of how many prescriptions pharmacists review and process each hour.
Meehan alleges that the quota requirement has "harmful results." According to the complaint, "Pharmacists select the easiest prescriptions to read, review, and fill, known within Medco Health as 'cherry picking,'" while ignoring prescriptions that might require their professional judgment, analysis or other intervention.
Blyskal is accused of running "Monday beatings," weekly conference calls during which pharmacy general managers were berated in front of their peers for falling short of prescription volume goals.
The U.S. attorney also says that pharmacy technicians often were given responsibilities that, by law, should have been performed by or supervised by registered pharmacists.
The amended complaint reiterates earlier accusations that the PBM canceled, destroyed and switched prescriptions and falsifying other documents for a period of at least eight years. It incorporates charges brought in a February 2000 qui tam suit by New Jersey physician Joseph Piacentile, M.D., and a 1999 complaint by George Bradford Hunt and Walter Gauger, two pharmacists who worked at a Medco mail-order pharmacy in Las Vegas until 1998.
Medco says in its Tuesday statement that the whistleblowers already "had been discredited." The company does not elaborate.