A Pennsylvania judge has ordered CVS to pay $289 million in damages as part of a long-running whistleblower case.
The court ruled in whistleblower Sarah Behnke's favor in June following a bench trial, determining that CVS Caremark pushed insurers including Aetna, where she previously worked, to submit inflated pharmaceutical claims to the federal government dating back to 2010.
Behnke also alleged that Caremark paid pharmacies like Rite Aid and Walgreens less for medications. The lawsuit was first filed in 2014, before CVS Health acquired Aetna. That merger closed in 2018.
In June, Judge Mitchell Goldberg, of Pennsylvania's Eastern District Court, set the initial damages at $95 million. Now, he's entering a final judgment of $289.9 million, including $285 million in actual damages and $4.9 million in civil penalties.
The court found CVS liable for only two years of overbilling, but Goldberg said the evidence presented during the trial made clear that the company's actions were "financially motivated," leading him to triple the initial damages.
In court documents, CVS argued that Behnke's claims were not fully proven and that the initial $95 million penalty was substantial enough. However, Goldberg said that fraudulent claims to Medicare erode the public's faith in the Centers for Medicare & Medicaid Services (CMS).
"CMS relies on companies like Caremark to truthfully and accurately report Part D drug prices," Goldberg said in Tuesday's order. "Caremark’s conduct broke CMS’s trust, and as a result, the public’s trust in CMS."
He also said that the ultimate penalties are "the appropriate measure of damages in light of Caremark’s fraud and concealment."
A CVS Health spokesperson told Fierce that the company intends to appeal the decision.
Last month, a New York judge hit CVS and its Omnicare division with nearly $950 million in penalties and damages related to a separate False Claims Act whistleblower case. A federal jury determined that Omnicare submitted more than 3.3 million in fraudulent prescription claims between 2010 and 2018.
CVS acquired Omnicare in 2015, and the courts determined that the parent company incentivized Omnicare to submit about 1 million of those claims after the deal closed.