Medco's Talking Cure

Medco (MHS Quote) could be on the verge of chasing away a nagging legal headache.

The giant pharmacy benefit manager has signaled a new willingness to settle a six-year-old government probe of its business practices. A court order issued last week says the parties have temporarily abandoned their original schedules -- which had them headed for a 2006 trial -- "to permit settlement discussions" instead.

The federal government has accused Medco of defrauding customers by shorting, changing and canceling their prescriptions. The government has already forced Medco to adopt different business practices -- a move that has hurt the company's margins -- but continues to seek monetary damages that, some believe, could top $1 billion. ...