CareMark target of class-action suit

July 31, 2006

The law firm Hagens Berman Sobol Shapiro has filed a proposed class-action suit in the U.S. District Court of Arizona, alleging that CareMark Rx intentionally concealed revenue in order to avoid paying certain commissions owed to consultants who marketed and sold its services.

CareMark target of class-action suit

The law firm Hagens Berman Sobol Shapiro has filed a proposed class-action suit in the U.S. District Court of Arizona, alleging that CareMark Rx intentionally concealed revenue in order to avoid paying certain commissions owed to consultants who marketed and sold its services. According to the complaint, CareMark engages consultants to market and sell its services to health plan sponsors and plan participants. If an entity contracts with CareMark to use its pharmaceutical services, the consultant is entitled to either a percentage of the total revenue-including administrative fees-or a set rate for each drug purchased. The complaint states that CareMark failed to honor the plain language of the consulting contracts by not paying commissions based on total revenues and instead paying commissions based on only partial revenues. A CareMark spokesman told Drug Topics, "We believe the lawsuit has absolutely no merit."

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