Rite Aid sues prescription plan over nonpayment of drug bills

August 20, 1993

Rite Aid Corp. has sued a Baltimore company that directed thousands of people its way for prescription drugs, saying the company didn't pay the full bill after Rite Aid served its clients at a discount price.

According to the lawsuit filed in U.S. District Court in Baltimore, Prescription Drugs Inc. failed to pay $929,756 for drugs sold by Rite Aid in Maryland since 1988. It said the company owner, William E. Allen, did not respond to letters and calls from Rite Aid demanding payment, and Rite Aid terminated its agreement to supply drugs to PDI clients in June.

Mr. Allen did not return a message with his company asking for comment.

PDI is a third-party administrator that brokers drug prescription plans for employer groups, according to the suit. It solicited group business and, by promising volume, it was able to persuade local pharmacies including Rite Aid to provide drugs at a discount to group members who presented a card at their stores. Under the agreement, PDI was to pay Rite Aid for drugs within 10 days of billing.

The total volume of business with Rite Aid over the years is unknown.

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