Medco Health Services Falling on Loss of CalPERS Contract

[CountAllVotes]

CalPERS, the California state pension fund, said it won’t be signing a new contract with pharmacy benefits manager Medco Health Services (MHS) as it looks into possible improprieties in the signing of its last contract. MedCo was one of three finalists to win a new contract with CalPERS.

Medco paid a former CalPERS board member $4 million for consulting as it pursued the CalPERS contract in 2004, and CalPERS has been investigating the board member’s dealings with investment firms that had been trying to make deals with the pension fund, according to a report from CalPERS. California Treasurer Bill Lockyer said the Medco contract “carries an aura of bag men and payola.” Medco CEO David Snow defended the company’s integrity without being specific on Thursday, but shares fell an additional 2.8%, after dropping 4.9% on Wednesday. The company said it will soon release more information about the contract.

Lazard analyst Tom Gallucci thinks Medco will eventually come out with information that adds a new dimension to the story — MHS itself may have been “strong-armed,” Gallucci speculates. The CalPERS contract is worth about 3 to 5 cents of EPS, but any improprieties could damage the company’s reputation and weigh disproportionately on the shares, according to Gallucci. The company’s failure to offer a detailed response may be hurting the stock, he contends.

http://blogs.barrons.com/stockstowatchtoday/2011/03/17/medco-health-services-falling-on-loss-of-calpers-contract/?mod=yahoobarrons

Alas, the crooks got caught. No more job for you corporate pigs.

[Adsos Letter]

1. Enrollment by CalPERS is a major goal for any of the health insurance companies in California.

Loss of contract eligibility is bound to leave a mark.

[CountAllVotes]

2. I hope MEDCO goes broke

They are crooks without a doubt. I won't go into any details but I am no longer using them as much as possible! :grr:

[CountAllVotes]

3. Class action lawsuit filed today

Lawsuit Filed Over Tainted CalPERS Pharmacy Contract; Alleged Bribes, Clandestine Meetings Cited in Award to Medco Health SolutionsLast update: 3/18/2011 1:01:00 PMLawsuit seeks suspension of Medco pharmacy benefits agreement, restitution to CalPERS members forced to pay higher charges to fund illegal activity and certification as class action. SACRAMENTO, Calif., Mar 18, 2011 (BUSINESS WIRE) -- A lawsuit was filed in Sacramento Superior Court today by attorneys acting for state workers and others forced to pay higher charges for prescription medicines as a result of alleged bribes and clandestine meetings held between Medco Health Solutions (Medco) and senior executives and directors of the California Public Employees' Retirement System (CalPERS). The lawsuit asks the Court to suspend Medco's pharmacy benefits agreement with CalPERS, force Medco to pay restitution for all amounts paid to Medco and its agents, and certify the lawsuit as a class action to allow any CalPERS member harmed by Medco to seek the compensation due them under the law. "Bribery is not a victimless crime," said Michael A. Hackard, lead attorney for the plaintiffs. "And in this case, every CalPERS member who was forced to pay higher charges for prescriptions so that Medco could secretly wine and dine CalPERS officials or pay millions of dollars in kickbacks to so-called 'placement agents' is a victim." "Medco needs to make restitution for every person their actions have harmed," said Hackard. "And they should also be forced to disgorge any and all profits they might have made under this tainted agreement." In addition to Medco Health Solutions, the lawsuit names former CalPERS CEO Federico Buenrostro and former CalPERS Directors Charles "Chuck" Valdes and Kurato Shimada. Additional defendants may be named later. The roles of all three men, along with so-called "placement agent" Al Villalobos, were revealed as a result of an independent investigation conducted on behalf of CalPERS. Among other things, the report alleges that Medco Chairman and CEO David Snow paid more than $4 million in "placement fees" to Villalobos, who in turn offered trips, jobs, condominiums and other inducements to Buenrostro, Valdes, Shimada and others in order to win a lucrative pharmacy benefit contract from CalPERS. The Medco case is being probed by the California Attorney General's Office and the federal Securities and Exchange Commission according to both CalPERS and Medco. Buenrostro and Villalobos are also the object of a civil enforcement action by the state Attorney General alleging bribery and corruption in connection with their overall dealings with CalPERS. New Jersey-based Medco is the nation's largest pharmaceutical benefits administrator, with sales of more than $60 billion annually. In 2009, Medco provided $500 million worth of prescription drugs to CalPERS members. After the federal government, CalPERS is the nation's largest purchaser of health care, providing more than 1.7 million state and local government workers, retirees and family members with medical and prescription drug coverage. Michael A. Hackard will serve as lead counsel. Plaintiffs will also be represented by Archie C. Lamb of Birmingham, AL. Lamb has represented California clients in the past, most recently as lead counsel for the California Medical Association in their class action lawsuit against WellPoint, Inc. (Blue Cross in California) concerning pricing and reimbursement issues. SOURCE: Hackard Law Firm for Hackard Law Firm Kevin Eckery, 916-443-2528 [e-mail] Business Wire 2011

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:nopity: :nopity: :nopity: :nopity: :mad:

Lucky for us, the "attorney general" that nailed their asses is our governor, Jerry Brown! :D

Thank you Governor Brown!

[marlakay]

4. I was wondering how Jerry was doing

we left the state 6 years ago and most of family still there so hoping things would improve. Go Jerry!

[CountAllVotes]

5. Jerry Brown is a good man

And this story here just shows a very small piece of all of the fine work he has done.

I'd still like to see him as President of the United States!

YES I WOULD! :D

[mike_c]

6. I pay three times as much for my prescriptions just to NOT use Medco...

...because they will not play nice with my physician's office. Screw Medco. Anthem BC charges me three times the copay they would charge if I filled prescriptions at Medco rather than my neighborhood pharmacy, but my pharmacy works closely with the doctor's office rather than trying to dictate terms to them. They get my business, with a smile.