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CVS Settles Fraud Allegations with the US, Multiple States & Cities
Post 5246

False Claims Act Claims Resolved by CVS

In United States Of America v. CVS Pharmacy, Inc. et al, Nos. 18 Civ. 3047 (JGK), 19 Civ. 1550 (JGK), 19 Civ. 8454 (JGK), 19 Civ. 11244 (JGK), 20 Civ. 2173 (JGK), 18 Civ. 3047 (JGK), United States District Court, S.D. New York (December 1, 2025) Honolable John G. Koeltl United States District Judge concluded that Relators filed the above-captioned multiple actions against defendant CVS Pharmacy, Inc. ("CVS”) and other entities on behalf of the United States under the qui tam provisions of the False Claims Act, 31 U.S.C. § 3729 et seq., on behalf of 30 states, the District of Columbia, Puerto Rico, and the Virgin Islands under comparable state false claims and insurance fraud laws, and on behalf of six municipalities under comparable municipal false claims laws, which were designated as “related” pursuant to the Local Rules of this Court (collectively, the “Actions”).

Under the settlement approved by the court CVS agreed to pay a total sum of $37.76 million, with $24,446,240 to be paid to the United States and the remainder to be paid to various states. As part of the settlement, CVS also admitted and accepted responsibility for certain conduct alleged by the Government in its complaint, including that GHPs paid CVS substantial amounts for insulin pen refills that were ineligible for reimbursement and CVS pharmacies dispensed more insulin to GHP beneficiaries than they needed.

The US Attorney noted that “CVS engaged in a decade-long practice of repeatedly prematurely refilling insulin prescriptions for patients and improperly billing government healthcare programs for more insulin than patients needed... These programs rely on pharmacies to follow appropriate refill schedules and to accurately report the amount of medicine dispensed, which CVS pharmacies frequently failed to do.”

The USDC concluded that on or about May 5, 2025, the Plaintiff States, with the exception of the California Department of Insurance, filed a Notice of Decision to Decline Intervention, notifying the Court of their decisions to decline intervention in these Actions (the “State Notice of Declination”).

On or about October 1, 2025, relator RJA, LLP, filed a notice voluntarily dismissing without prejudice claims it asserted on behalf of five Plaintiff Municipalities (the “RJA Notice of Municipal Claims Dismissal”), and on or about October 15, 2025, the Court issued an Order granting RJA, LLP's motion to voluntarily dismiss without prejudice claims it asserted on behalf of the City of Chicago (the “RJA Chicago Claims Dismissal Order”).

The United States filed a Complaint-in-Intervention (the “Government Complaint”) against CVS; and the United States, CVS, and Relators have entered into a Stipulation and Order of Settlement and Dismissal (the “Settlement”);

Since the United States and Relators have entered into a Stipulation and Order of Settlement and Release Between the United States and Relators (the “Relator Stipulation”) it was ordered that:

The seals were lifted as to the Government Notice of Partial Intervention, the State Notice of Declination, the RJA Notice of Municipal Claims Dismissal, the RJA Chicago Claims Dismissal Order, the Government Complaint, the Settlement, the Relator Stipulation, and the complaints and any amended complaints filed by Relators in these Actions and the settlement was approved.

ZALMA OPINION

Multiple CVS entities across the country were sued by "Relators" in a Qui Tam suit that was joined by the US Government, several states and cities for violation of the False Claims Act. The various parties agreed with the CVS entities and pharmacies and presented the agreement to the court which decided to approve the settlement and provide the US Treasury and state and city treasuries with funds they did not have.

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