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Drug kickback allegation denied

Wednesday, Dec. 10, 2003 | 9:31 a.m.

NEW YORK -- Oxford Health Plans Inc., one of the New York area's biggest health insurers, denied it received kickbacks from Medco Health Solutions Inc. after prosecutors charged that Medco made illegal payments.

The U.S. Justice Department on Tuesday accused Medco, which manages prescription drug benefits for clients, of paying $87.4 million in 2001 to obtain the business of an unidentified health insurer. Oxford confirmed that it's the insurer, yet said the five-year arrangement only covered costs related to switching to Medco and payment for providing consulting services to Medco.

U.S. prosecutors are expanding their charges against Medco -- a big employer in Las Vegas -- after filing an original suit in September that alleged the company gave preferential treatment to former parent Merck & Co. Franklin Lakes, N.J.-based Medco, which acts as a middleman to negotiate discounts on large purchases of drugs for customers such as insurers, has denied wrongdoing.

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