No Labor of Love at Medco

Still, Medco's strategy seemed to work. At times, some people had predicted that the company could pay as much as $1 billion to put the sweeping case behind it. But as the years dragged on -- swamping a particularly busy prosecutor's office with work -- some feel that the company simply outlasted its accusers.

Patrick Burns, a spokesman for Taxpayers Against Fraud, suggested as much when discussing the settlement with TheStreet.com on Friday.

"The truth of the matter is that Medco threw up every technical roadblock it could in this case," says Burns, whose organization endorses whistleblower lawsuits like those used in the Medco case. "Just the discovery process was exhausting. ... You have to remember that corporations have almost unlimited resources to fight these cases -- especially when they involve a core part of their business."

Yet Burns feels like the government accomplished some major goals in the end.

"When the PBM industry first started receiving a lot of scrutiny -- due almost entirely to whistleblower lawsuits -- it resisted transparency and said it was accountable to no one," Burns recalls. "Now, the industry has increased transparency and a grudging agreement that it is at least accountable to its clients.

"That is a sea transformation. Whether it's enough remains to be seen."

In the meantime, Medco's stock bounced 4.5% to $53.03 on news of the favorable settlement and solid quarterly results. The stock is now trading near the midpoint of its 52-week range.

Signs of Change

Medco itself has acknowledged one major change in the industry.

CEO David Snow said on Friday that state governments, in particular, have stepped up their calls for transparency. However, he said that Medco has actually benefited from that shift -- by offering its clients transparent business models -- and pointed to the company's recent string of state contract wins as evidence.