By Jonathan Stempel
(Reuters) -CVS Health’s pharmacy benefit manager unit must pay the U.S. government $95 million after a federal judge found it overcharged Medicare for prescription drugs.
Chief Judge Mitchell Goldberg in Philadelphia ordered the payment by CVS Caremark on Wednesday, following an eight-day non-jury trial in March in the whistleblower case.
Goldberg will decide after further briefing whether to triple the award to $285 million under the federal False Claims Act.
The case was brought in 2014 by Sarah Behnke, a former head actuary for Medicare Part D at Aetna.
Behnke accused CVS Caremark of having since 2010 caused health insurers, such as Aetna, to submit inflated claims to the Centers for Medicare and Medicaid Services (CMS), while pharmacies such as Rite Aid and Walgreens were paid less.
CVS bought Aetna in 2018.
Despite ruling for CVS Caremark on some claims, Goldberg concluded in a 105-page decision that the unit knew it was managing drug prices in a manner that boosted margins, and therefore profit.
“Although it is true that Aetna had the ultimate responsibility to submit the claims, I disagree that this responsibility absolves Caremark of culpability,” Goldberg wrote.
CVS, based in Woonsocket, Rhode Island, said on Thursday it was disappointed in the rulings against CVS Caremark.
The False Claims Act lets whistleblowers sue on behalf of the government and share in recoveries, typically 15% to 30%.
Though not directly involved in Behnke’s case, the federal government said in an October 2023 court filing it had a strong interest in ensuring that Medicare Part D did not pay inflated drug prices, and information reported by plan sponsors and pharmacy benefit managers to CMS reflects the true costs.
The case is US ex rel Behnke v CVS Caremark Corp et al, U.S. District Court, Eastern District of Pennsylvania, No. 14-00824.
(Reporting by Jonathan Stempel in New YorkEditing by Marguerita Choy)
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