Caremark Rx Settles Suits

Caremark Rx Inc., a pharmacy benefits manager, and the Justice Department agreed Thursday to a $137.5-million settlement of lawsuits claiming that a predecessor company took kickbacks affecting several federal healthcare programs.

Nashville-based Caremark admitted no wrongdoing in making the settlement, which was approved by a Philadelphia federal court Thursday.

The lawsuits were filed in 2002 by three former executives of AdvancePCS Inc., a Texas-based pharmacy benefits manager that Caremark acquired in March 2004. The Justice Department joined later. The lawsuits contended that AdvancePCS took kickbacks from drug manufacturers and paid customers kickbacks to sign contracts for pharmacy benefits management. All allegations date to before Caremark took over AdvancePCS.

Not dismissed by the settlement are whistle-blower claims on behalf of 10 states, including California, and a separate Justice Department and whistle-blower lawsuit alleging that the company did not appropriately repay Medicaid and other federal insurance programs. Caremark has denied those claims.