S.D. Reaches Agreement with Medco Health Solutions

Attorney General Larry Long announced this week that South Dakota has reached an agreement with Medco Health Solutions resolving claims of deceptive trade practices.

The State alleged that Medco encouraged prescribers to switch patients to different prescription drugs, but sometimes failed to pass the savings to patients or their health care plans.

“We hope this settlement will result in a more honest and open approach to the pharmacy benefits industry,” said Long. “This settlement is also essential in the continuing battle for affordable prescription drugs for the residents of South Dakota.” 20 state attorneys general alleged that the drug switches actually resulted in increased costs to health plans and patients, primarily in follow-up doctor visits and tests. For example, Medco reportedly switched patients from certain cholesterol-lowering medications (statins) to Zocor, a drug that required patients to receive follow-up blood tests at additional costs.

Under the multistate settlement, Medco is ordered to pay $2.5 million to patients who incurred expenses related to switches between cholesterol-controlling drugs from 1999 to the present. Affected consumers will receive a notice and claim form from the company in the mail within the next few months.

This settlement was a result of a multistate action that was taken in April of 2004. The Attorney General’s Office worked directly with the Bureau of Personnel in negotiating this agreement with Medco.

Medco will pay the State of South Dakota $234,700 which will be returned to the general fund. Medco agreed to pay this amount to settle a claim they had failed to pass rebates on to the state while serving as the pharmaceutical benefits manager for state employees from 1995 to 2002.