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Robins, Kaplan, Miller & Ciresi L.L.P. Settles Whistleblower Suit Against Caremark Rx (CMX) For $137.5 Million


10/19/2005 5:09:15 PM

WASHINGTON, Sept. 8 /PRNewswire/ -- Robins, Kaplan, Miller & Ciresi L.L.P. announces that Caremark Rx, Inc., formerly known as AdvancePCS, Inc., has agreed to pay $137.5 million to settle landmark litigation brought against the pharmacy benefits manager (PBM) by three whistleblowers.

The settlement, the first of its kind involving a federal False Claims Act suit against a PBM, was unsealed Sept. 8, by the Honorable Norma L. Shapiro, in the Eastern District of Pennsylvania in Philadelphia.

Robins, Kaplan, Miller & Ciresi L.L.P. represented two former executives of AdvancePCS, Inc. and one former executive of Advance Paradigm. The firm filed a suit against AdvancePCS and a suit against Advance Paradigm under the federal False Claims Act on behalf of the United States. The False Claims Act allows private citizens to sue individuals and companies they believe have defrauded the government.

The complaints, the first of which was filed in 2002, allege the PBMs knowingly solicited and received kickbacks from pharmaceutical manufacturers. These kickbacks were allegedly paid in exchange for favorable treatment of the manufacturers' products under contracts with government programs, including the Federal Employees Health Benefit Program, the Mailhandlers Health Benefit Program and Medicare+Choice programs. The lawsuits also allege that improper kickbacks were paid by AdvancePCS and Advance Paradigm to existing and potential customers as an inducement to their signing contracts with the PBMs. The government also incorporated in the Settlement Agreement allegations involving flat fee rebates which were allegedly received for inclusion of certain heavily utilized drugs.

As part of its purchase of AdvancePCS, Inc. in 2004, Caremark Rx, Inc. assumed responsibility for defending these cases but specifically denies any liability or wrongdoing.

"This settlement lets the PBM industry know that if they engage in fraudulent conduct, they will be found out, and there will be significant consequences," said W. Scott Simmer, a partner with Robins, Kaplan, Miller & Ciresi L.L.P. and lead counsel to the three plaintiffs. "Each of our clients came forward because they thought it was the right thing to do to improve the PBM industry. They put their careers and their families on the line and are delighted with the result in this case."

Not dismissed in the settlement are whistleblower claims on behalf of 10 states.

Robins, Kaplan, Miller & Ciresi L.L.P. (http://www.rkmc.com) is a national law firm with offices in Atlanta, Boston, Los Angeles, Minneapolis, Naples (FL), and Washington, D.C.

Robins, Kaplan, Miller & Ciresi L.L.P.

CONTACT: Kevin Aschenbrenner, 604-689-1159, aschk@jaffeassociates.com, forRobins, Kaplan, Miller & Ciresi L.L.P.



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