U.S. Sues Medco, Alleging Fraud

Federal prosecutors accused the nation’s biggest pharmacy benefit management company of defrauding clients by destroying prescriptions, switching patients’ medications without their consent and giving favorable treatment to drug companies that paid hefty rebates.

A lawsuit filed in Philadelphia accuses Medco Health Solutions Inc. of altering prescription records to avoid paying late penalties in its mail-order business and steering customers to drugs made by its former parent company, Merck & Co., instead of competitors’ less expensive products.

Medco executives called the charges either false or overstated.

Shares of Medco rose $1.05 to $26 on the NYSE.