A whisteblower lawsuit against
is starting to sound off-key.
In an unusual twist, the giant pharmacy benefit manager -- accused of selling returned drugs to unsuspecting customers -- is actually inviting prosecution by Florida. The company said on Thursday that it supports the state attorney general's intervention in a case that it has "strenuously refuted" as baseless in the past.
To be sure, the state's motion itself is far from typical. It makes absolutely no mention of the allegations against Caremark but instead suggests that the state should intervene because of some potential conflict with the whistleblowers. Specifically, it says that there is a "strong possibility" that at least one of the whistleblowers could soon face an administrative hearing before the state and, thus, should not be allowed to direct the litigation. It also makes clear that Caremark voiced no opposition to the state's intervention.
Caremark followed up on Thursday by saying that it even welcomed the move. The developments had no impact on Caremark's stock, which rose 8 cents to $32.86 late Thursday.
"Caremark has strenuously refuted the allegations brought against the company by the relators and sought the Florida attorney general's intervention," the company stated. And "immediately following the filing of the
state's motion, Caremark today filed a separate motion to stay all discovery in this case on the basis that it would be inappropriate for the relators to continue participating in discovery until the court has ruled on the department's motion to intervene."
But Mike Leonard, the Chicago attorney representing the whistleblowers, told
on Thursday that Caremark has already lost that motion. He said he will, therefore, proceed with the depositions this week of two Caremark workers who are familiar with the company's business practices. Leonard has already collected damaging testimony from other Caremark employees that bolsters the whistleblowers' allegations that the company has defrauded customers by, among other things, destroying prescriptions and selling returned drugs.
Leonard claims that Florida has been told -- by none other than Caremark itself -- that the company has, in fact, engaged in some improper business practices. But he says the state nevertheless declined to include any allegations against Caremark in its motion because the company objected.
"It is virtually unheard of for a state attorney general's office to confer with a party that is purportedly engaged in fraud and to seek their approval for wording in a motion that could be potentially negative for them," Leonard marvels. "It doesn't happen."
The state attorney general's office, told by
that its actions looked suspicious to some, had little to say about the matter.
"As for our motion, it does at this point speak for itself," says JoAnn Carrin, communications director for the state prosecutor. "It would be premature to discuss
the case until we present the motion to the judge."
Carrin says the attorney general allowed both parties to review the motion before it was officially filed. But Leonard claims the state took suggestions only from Caremark when finalizing its motion. He also says the state spent months discussing the case with Caremark, and even talking about a possible settlement, before this week's development.
Leonard adds he doesn't even know what the administrative hearing is about. He claims that his plaintiffs, married Caremark pharmacists Michael and Peppi Fowler, were always employees in good standing before they sued the company. The pair originally filed their complaint last year and, without any government intervention, have continued to build their case against the company since that time.
Other prosecutors have been far less friendly when dealing with defendants in whistleblower lawsuits. For example, Assistant U.S. Attorney James Sheehan continues to vigorously pursue
-- which recently inked settlements with 20 states -- for some of the same questionable business practices allegedly carried out at Caremark. Sheehan has refused to back down even though Medco has loudly challenged the credibility of the whistleblowers involved in that case.
In contrast, some believe that the Florida prosecutors may be listening all too closely to what Caremark has to say.
"It's interesting that the Florida attorney general weighs allegations of administrative misconduct against one of the relators more seriously than allegations that its own citizens were bilked out of hundreds of millions of dollars by Caremark," one industry source says. "All whistleblowers have warts, to some extent. But at the end of the day, the allegations should matter more than the people who make them."