The Five Dumbest Things on Wall Street This Week

5. Medco's High Standards

Medco (MHS) just wants to do right by people.

That's why the Franklin Lakes, N.J., pharmacy-benefit manager agreed Monday to pay $155 million plus interest to settle government false-claims allegations.

The Justice Department alleged that Medco submitted false claims to the government, solicited and accepted kickbacks from pharmaceutical manufacturers to favor their drugs, and paid kickbacks to health plans to obtain business.

As a condition of continued participation in government health programs, the feds required that Medco enter into a corporate compliance agreement with the Office of Inspector General and other government offices.

"Pharmacy-benefit managers are ultimately accountable to their patients and these agreements increase that level of accountability," said the U.S. Attorney for the Eastern District of Pennsylvania, Patrick Meehan. "Pressure by an employer to reduce costs and increase profits must never be allowed to coerce pharmacists into ignoring their duties to patients."

But at Medco, no one has even heard of coercion, let alone participated in it.

"After nearly seven years of inquiry, these issues end as they began -- with no finding of wrongdoing by Medco or any of its people," Medco spokeswoman Soraya Balzac said on Monday. "Even though we did nothing wrong, for our company and our clients, it is the right decision to put these aged matters in the past. Our business practices today are widely regarded as setting the standard for our industry."

And what a standard it is.

Dumb-o-Meter score: 75. Being right often costs $155 million, we find.

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