Caremark ( CMX) has a bitter pill to swallow.

Turned back in its efforts to have a whistleblower lawsuit dismissed, the giant pharmacy appears to be headed for a high-stakes trial. Chicago attorney Mike Leonard told TheStreet.com on Monday that a Florida court has ruled that a lawsuit accusing Caremark of serious misconduct can move forward.

The lawsuit, being heard in the state's Second Circuit Court in Leon County, claims that Caremark wronged state customers by, among other things, falsifying prescription dates and reselling medications that had been returned through the mail. Leonard, who filed the complaint on behalf of two Caremark pharmacists and the state of Florida, has estimated potential damages in the case at $100 million. He says he hopes the case will go to trial by the end of 2004 or at least next year.

Caremark spokesman Gerard Carney told TheStreet.com on Tuesday that "these allegations and the complaint are without merit and we will vigorously defend ourselves against them."

If the claims against Caremark are upheld, the alleged business practices may have significantly boosted Caremark's profits by triggering bonuses -- rather than penalties -- for turnaround times and doubling the amounts collected for resold prescriptions. Florida is seeking triple damages for any losses it suffered as a result. And it could have company.

According to the whistleblower suit, Caremark has victimized customers well beyond the Sunshine State. The case, recently bolstered by testimony from a top Caremark manager, alleges serious abuses in at least two other states as well. In a sworn deposition cited by the plaintiffs, Illinois Caremark manager Carlos Gonzales indicated that the company had engaged in questionable behavior -- and then deliberately covered its tracks -- in both his home state and Texas.

Even Caremark's own legal counsel has allegedly confirmed that the company destroyed dated envelopes revealing when prescriptions were actually received. The real dates, plaintiffs insist, would show that Caremark often missed the turnaround requirements laid out in its contracts.

"Caremark not only destroyed that direct evidence of its own fraud in the state of Florida at the Florida facility, but it also destroyed direct evidence of its fraud at its other prescription drug processing sites," the plaintiffs state in their response to Caremark's motion to dismiss. Caremark's attorney "even audaciously requested last week that plaintiff's counsel agree that it is appropriate for Caremark to continue to engage in that activity."

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