Vioxx Pain Could Spread to Medco

But some still worry about Medco's legal exposure. Granted, most agree that Merck will bear most -- if not all -- of any lawsuit damages. But Kleiman, for one, suggests that Medco may not get off scot-free.

"This would matter from the federal prosecutors' perspective," he said. "Secretly switching people to drugs that may poison them ... is not the kind of behavior they really want to tolerate."

Fresh Peace

To be fair, however, Medco has already put some of its regulatory problems behind it. Earlier this year, Medco paid $29 million to settle allegations lodged against the company by 20 states. As part of that deal, the company also agreed to disclose "material differences in side effects between prescribed drugs and proposed drugs."

State prosecutors were quick to applaud the new arrangement.

"This settlement is important," Massachusetts Attorney General Tom Reilly said, "because it establishes standards that will protect patient safety and also ensures that health plans and patients really save money from PBM-managed switches."

Earlier this week, Medco won praise from another attorney general after following through with the monetary portion of its settlement in that state. Florida Attorney General Charlie Crist described Medco as a "good corporate citizen" for arranging to provide $2.3 million worth of drugs to the state's needy, the Miami Herald reported.

The same attorney general tried, but failed, to intervene in a separate whistleblower complaint against competing PBM Caremark (CMX Quote). He left some critics convinced that he was less interested in protecting Florida citizens than in protecting Caremark itself.

Michael Leonard, the Chicago attorney who continues to control the Caremark case, criticized Crist for praising Medco when the company remains accused by federal prosecutors of "fraud on a massive basis."

"That's not just a mixed message," he said. "That's a horrible message."