CVS Caremark has been ordered to pay $95 million after a federal judge found the pharmacy benefit manager improperly inflated Medicare Part D drug prices by failing to report required pharmacy discounts, violating the False Claims Act.
The ruling follows a bench trial in March and stems from a whistleblower lawsuit that was initially filed in 2014 by a former Aetna actuary, according to court documents reviewed by Becker’s.
U.S. District Judge Mitchell Goldberg of the Eastern District of Pennsylvania ruled that CVS Caremark failed to report post-sale pharmacy price concessions, especially with respect to Walgreens and Rite Aid, which it is required to do under Medicare Part D rules, causing inflated costs to be passed onto the federal government.
The court found that, while the PBM paid pharmacies negotiated average prices, it only reported individual transaction prices, which were often higher, to insurers who then passed those numbers on to CMS. Under Medicare Part D rules revised in 2010, government subsidies are required to be based on the prices actually paid to pharmacies, including the negotiated discounts.
