Medco Gets Charged With Fraud

The U.S. attorney's office in Philadelphia files a 60-page civil complaint.
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Federal prosecutors charged

Medco Health Solutions

(MHS)

with fraud on Monday.

The U.S. attorney's office in Philadelphia filed a 60-page civil complaint against the company, alleging it destroyed mail orders for prescription drugs or delivered less than the prescribed quantity to federal employees covered by the Blue Cross plan, while charging the government full price.

Medco was also accused of intimidating pharmacists and giving preference to drugs made by its former parent company,

Merck

(MRK) - Get Report

.

The pharmacy-benefits manager denied the allegations, saying the charges are unfounded.

The civil complaint, which seeks to fine the company and stop its alleged unfair practices, follows two other lawsuits filed by former Medco employees and a doctor.

The company has been under a federal probe for the last four years in connection to its ties to the pharmaceutical industry.

The company scheduled a conference call with investors at 4:30 p.m. EDT to respond to the U.S. Attorney's claims.

Medco shares were up 66 cents, or 2.7%, at $25.61 in afternoon trading Monday.