In June 2004, 20 state Attorneys General resolved certain claims against Medco for approximately $30 million. The state prosecutors’ claims primarily concerned Medco’s alleged wrongful practice of switching prescriptions from low-to-high cost drugs. The federal government simultaneously settled its drug-switching claims against Medco. The Massachusetts’ Attorney General also resolved Massachusetts’ claims that Medco had wrongfully manipulated manufacturer rebates and thereby deprived Massachusetts of savings of approximately $6 million.

The claims of the various states against Medco — and the settlements reached by the states — can be understood through a review of Iowa’s Complaint and Settlement Agreement:

In October 2006, Medco also agreed to pay the federal government $155 million to settle claims that Medco had engaged in wrongdoing.  The federal government’s claims — and settlement — can be understood by reviewing the following documents: