Federal judge orders CVS to pay nearly $290 million for defrauding Medicare

• CVS Caremark systematically defrauded Medicare by submitting false drug pricing reports for years, costing taxpayers nearly $100 million.
• A federal judge ordered the pharmacy benefit manager to pay $285 million in tripled damages plus $4.87 million in civil penalties.
• Whistleblower Sarah Behnke exposed the decade-long scheme where CVS hid profits by manipulating drug cost data submitted to federal regulators.
• The judge rejected CVS arguments for reduced penalties, stating the fraud was financially motivated and deliberately concealed from authorities.
• CVS faces additional lawsuits from Louisiana for anti-competitive practices, and lawmakers are pushing new transparency legislation targeting pharmacy middlemen.

For years, Big Pharma and its pharmacy middlemen have been operating like criminal enterprises, engaging in price-fixing, defrauding taxpayers, and manipulating drug costs while patients suffer. Now, a federal judge has confirmed that CVS Caremark, one of the largest pharmacy benefit managers (PBMs) in America, systematically lied to Medicare, overcharging the program by nearly $100 million. And this week, they were finally held accountable.

U.S. District Judge Mitchell S. Goldberg ordered CVS Caremark to pay $285 million in tripled damages, plus an additional $4.87 million in civil penalties, after the company was found liable for submitting false drug pricing reports to Medicare Part D. The ruling stems from a 2014 whistleblower lawsuit filed by Sarah Behnke, a former Aetna actuary who exposed how CVS manipulated drug costs to hide profits, costing taxpayers millions.

This isn’t just corporate greed; it’s fraud on a massive scale, and it proves once again that the pharmaceutical industry cannot be trusted to police itself.

A decade-long scheme to deceive Medicare

The fraud was simple but devastating. According to court documents, CVS Caremark anticipated a 2010 rule change that would cut into its profits from Medicare Part D drug reimbursements. Instead of accepting lower margins, the company devised a hidden profit scheme, submitting false drug cost reports to the Centers for Medicare and Medicaid Services (CMS).

Judge Goldberg found that CVS knowingly misled CMS for years, causing the agency to over-subsidize prescription drug costs by approximately $95 million. Even when questioned by regulators, CVS concealed the truth, breaking the public’s trust in a program meant to help vulnerable seniors.

“Caremark’s actions cost CMS close to $100 million and made the administration of Medicare Part D—a program aimed at lowering drug costs for a vulnerable population—more difficult,” Goldberg wrote in his ruling.

The judge rejected CVS’s argument that the penalties were excessive, stating that the fraud was “financially motivated” and not some innocent mistake. Under the False Claims Act, damages were tripled, sending a clear message: defrauding taxpayers will not be tolerated.

Whistleblower exposes the truth while CVS tries to dodge accountability

Sarah Behnke, the whistleblower who first exposed the scheme, worked at Aetna (now owned by CVS) when she discovered the fraud. Her lawsuit revealed that CVS intentionally, systematically, and recklessly submitted false drug pricing data, enriching itself at the expense of Medicare beneficiaries.

CVS, of course, is fighting back. The company released a statement saying it was “disappointed” in the ruling and plans to appeal. But let’s be clear: this wasn’t a misunderstanding. It was a deliberate, years-long effort to deceive the government and inflate profits.

CVS isn’t the only bad actor

This case is just the tip of the iceberg. Pharmacy benefit managers (PBMs) like CVS Caremark operate in the shadows, negotiating drug prices, setting reimbursement rates, and pocketing the difference—all while patients and taxpayers foot the bill.

Last month, Louisiana Attorney General Liz Murrill filed three lawsuits against CVS, accusing the company of unfair trade practices, price manipulation, and anti-competitive behavior. One lawsuit alleges CVS used its market dominance to impose “exceedingly high fees” on independent pharmacies, threatening to kick them out of its network if they didn’t comply.

Meanwhile, in Washington, lawmakers are finally taking notice. Senators Chuck Grassley (R-Iowa) and Maria Cantwell (D-Wash.) reintroduced the Pharmacy Benefit Manager Transparency Act in June, aiming to ban deceptive pricing schemes and force PBMs to disclose their profits.

Every time a company like CVS overcharges Medicare, it’s your tax dollars being wasted. Every time they manipulate drug prices, it’s seniors and working families who pay more at the pharmacy counter. And every time they get away with fraud, it emboldens them to do it again.

Sources for this article include:

TheEpochTimes.com

FoxBusiness.com

NYPost.com