Printer Friendly Version
Release Date: May 24, 2006
Release Number: 06-181-SAN
Contact Name: Gloria Della/David James
Phone Number: 202.693.4676/202.693.8664
Sacramento, California - The U.S. Department
of Labor today announced a consent judgment requiring Sacramento-based
Pharmaceutical Care Network (PCN), a pharmacy benefits manager, to
restore $721,323 to 24 health plan clients and pay civil monetary
penalties to the department. The judgment resolves a lawsuit against PCN
for allegedly retaining the assets of health plan clients in connection
with rebates from drug manufacturers and payments to pharmacies for
prescription drug claims.
“Rising health care costs are of concern to
everyone!” said Secretary of Labor Elaine L. Chao. “We aggressively
pursued compensation for these workers’ health plans, including any
improper profits gained at their expense.”
PCN is a wholly-owned subsidiary of National Medical
Health Card Systems Inc. that has processed drug claims, managed
pharmacy networks, and negotiated rebates with drug companies for more
than168 health plans governed by the Employee Retirement Income Security
Act (ERISA).
In addition to restitution, the judgment requires
that PCN disclose information to clients relating to pharmacy benefit
management services and fees and account for claim payments and rebates.
The lawsuit was filed simultaneously with the
judgment in federal district court in Sacramento. The suit alleges that
PCN improperly retained a portion of drug rebate amounts belonging to
multiemployer health plan clients. The suit also alleges that PCN
received undisclosed additional compensation from the plans by retaining
the difference between drug prices established by health plan clients
and the lower drug prices established between PCN and certain chain
pharmacies. In addition, the company allegedly retained an undisclosed
transaction fee for each pharmaceutical claim processed.
The case resulted from an investigation conducted by
the San Francisco regional office of the Labor Department’s Employee
Benefits Security Administration (EBSA). Tips
on health benefits for small employers may be found at EBSA’s Web
site.
In fiscal year 2005, EBSA achieved record monetary
results of $1.7 billion related to pension, 401(k), health and other
benefits for millions of American workers and their families. Employers
and workers can reach the San Francisco regional office at 415.975.4600.
Help with problems relating to private-sector retirement and health
plans can also be obtained by calling EBSA’s toll-free number,
1.866.444.EBSA (3272).
(Chao v. Pharmaceutical Care Network)
Civil Action No. 2:06-cv-01078-LKK-GGH
U.S. Department of Labor news releases are accessible on the
Department's Newsroom
page. The information in this news release will be made available
in alternate format upon request (large print, Braille, audio tape or
disc) from the COAST office. Please specify which news release when
placing your request at 202.693.7765 or TTY 202.693.7755. The U.S.
Department of Labor is committed to providing America's employers and
employees with easy access to understandable information on how to comply
with its laws and regulations. For more information, please visit the
Department's Compliance
Assistance page.
|