News from STRS: Findings Result in Jury Award

December 20, 2005

Almost two years to the day after Attorney General Jim Petro sued Medco Health Solutions on behalf of the State Teachers Retirement System of Ohio (STRS Ohio), a Hamilton County jury ordered Medco to pay $7.8 million to STRS Ohio. The lawsuit filed in December 2003 accused Medco of breaching its contractual and fiduciary duties while serving as the pharmacy benefits manager for STRS Ohio's Health Care Program. STRS Ohio had uncovered contract abuses during a routine due diligence audit of Medco's performance. After bringing them to the attention of the Attorney General, Petro filed suit in Hamilton County Common Pleas Court. STRS Ohio ended its relationship with Medco in 2001.

"The excellent work of our staff members and the high performance standards they set for all our vendors help ensure that the assets of this system are protected for our members and retirees," noted Damon Asbury, STRS Ohio's executive director.

Based on a jury decision reached on Dec. 19, STRS Ohio will receive $6.9 million for constructive fraud and $915,000 for breach of fiduciary duty. Additional court action may follow on several unresolved issues, including punitive damages.