CVS Hammered in Two Whistleblower Cases — Ordered to Pay More Than $1.2B

CVS Hammered in Two Whistleblower Cases — Ordered to Pay More Than $1.2B

On Tuesday, Federal Court Judge Mitchell Goldberg issued a ruling that is the second staggering decision against Woonsocket-based CVS in recent weeks.

Whistleblowers brought the two cases alleging fraudulent overbilling.

In the first case, Goldberg tripled to $285 million the damages he had ordered CVS Caremark to pay in June, citing the federal False Claims Act. He added a $4.87 million civil fine.

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“Goldberg rejected CVS' request to pay less, saying that while CVS Caremark was liable for only two years of overbilling, evidence at trial ‘made clear that the fraud was financially motivated, not the result of some innocent or mistaken belief,’” according to a report in Reuters.

Goldberg presided in March over a non-jury trial in the whistleblower case brought by Sarah Behnke, a former head actuary for Medicare Part D at Aetna.

“She accused CVS Caremark of having caused health insurers such as Aetna to submit inflated claims since 2010 to the Centers for Medicare and Medicaid Services (CMS), while pharmacies such as Rite Aid and Walgreens were paid less,” reported Reuters.

 

Second Blow to CVS

Goldberg's ruling was the second legal blow to CVS. Last month, a Manhattan federal judge ordered CVS' Omnicare unit to pay $948.8 million in a separate whistleblower lawsuit alleging fraudulent billing.

In the July decision, U.S. District Judge Colleen McMahon in Manhattan imposed a $542-million penalty for filing 3,342,032 false claims between 2010 and 2018. In addition, McMahon also awarded $406.8 million of damages, representing three times the $135.6 million that a jury had previously awarded.

 

DOJ Lawsuit Pending

CVS is also facing a massive lawsuit by the U.S. Department of Justice relating to the opioid crisis.

That suit has ties to the Rhode Island governor’s race as Helena Foulkes, a Democratic candidate for governor, served as President of CVS during a portion of the time the government claims the violations took place.

The DOJ lawsuit is not the only bad news for CVS. In December, CVS was linked to secret payments from opioid manufacturer Purdue Pharma.

CVS is one of the companies implicated in taking “secret” payments from Purdue Pharma in exchange for removing safety restrictions, according to a major investigation released by the New York Times.