Drug Companies Subpoenaed in U.S. Inquiry

Drug maker Schering-Plough Corp. and the nation’s two largest pharmacy benefit managers--PCS Health Systems Inc. and Merck-Medco Managed Care--said they received subpoenas last year as part of a federal drug pricing investigation. Merck-Medco is owned by drug maker Merck & Co. PCS is owned by drugstore chain Rite Aid. The subpoenas were issued by the Department of Health and Human Services’ inspector general’s office, the companies said, and the government is seeking information on their operations but did not include any allegations of wrongdoing. Pharmacy benefit managers are hired by large employers and managed-care plans to control the costs of providing prescription drugs. One way they save money is by negotiating discounts from drug makers. The probe is focusing on whether drug makers provided government health plans, particularly Medicaid programs, the same discounts given to the pharmacy benefit managers. Federal law requires pharmaceutical firms to give government health programs the lowest available market price. All of the companies said they have complied with federal drug pricing laws. On the NYSE, Merck fell $2.56 to close at $53.94, Schering-Plough fell $2.75 to close at $30.50, and Rite Aid fell 19 cents to close at $6.13.