Medco to Pay $2.75 Million to Settle CalPERS Lawsuit

March 26, 2012 ( – Medco Health Solutions agreed to pay $2.75 million and change its internal procedures to settle a claim it paid millions in brides to win a California Public Employees’ Retirement System (CalPERS) contract.  

According to the Los Angeles Times, this settlement is the latest action in the case, which began in 2004 and involved allegations of dealings between the then-head of CalPERS, Frederico Buenrosto Jr. and a paid Medco consultant and former CalPERS board member, Alfred J.R. Villalobos, who helped secure the $26-million contract in 2006 (see “Lawsuit Filed over Wrongdoing in CalPERS Pharmacy Contract”).

In 2006, Buenrostro and  other CalPERS executives allegedly lobbied Medco to pay a $4 million consulting fee to Villalobos before the pension fund approved the deal with Medco, according to a report last year from a CalPERS-funded investigation.

Under the settlement, Medco will pay the $2.75 million to the state and change its business practices so that it would not “unlawfully interfere or tamper with the competitive bidding process” of state agencies, reports the Los Angeles Times.

Medco did not admit to wrongdoing as part of the settlement, noting through spokeswoman Jennifer Leone Luddy that “there has been no finding that anybody at Medco did anything wrong at any time.”