WASHINGTON (AP) — The Department of Justice said Monday that a unit of CVS
Caremark Corp. has agreed to pay $5.25 million to settle allegations that it
reported false information on prescription drug prices to the government’s
Federal investigators said CVS’ RxAmerica subsidiary reported false
information about the prices of generic prescription drugs between 2007 and
2008. The Centers for Medicare and Medicaid Services used this information
in a website called Plan Finder, which seniors could use to estimate their
out-of-pocket drug expenses. But Department of Justice officials said the
actual drug prices offered by the company were “in some cases significantly
higher” than those submitted for use on the website.
"Those navigating our Medicare system deserve accurate information so they
can make informed choices and obtain the benefits to which they are
entitled,” said Loretta Lynch, U.S. Attorney for the Eastern District of New
Medicare provides health insurance coverage to about 48 million American
seniors and people with disabililties. Since 2006 the federal plan has
included coverage for prescription drugs, though the actual plans are
administered by private pharmacy benefit managers like CVS and Express
The civil settlement resolves allegations made in two separate whistleblower
lawsuits against Woonsocket, R.I.-based CVS in 2008 and 2009. The two cases
were combined in the Eastern District in November 2011.
CVS said it agreed to the settlement to avoid protracted and expensive
litigation. It noted the period in question came before it acquired
RxAmerica through its takeover of Longs Drugs Stores.
In January, CVS agreed to pay $5 million to resolve similar allegations
filed by the Federal Trade Commission.