A federal judge in Pennsylvania recently issued a ruling finding that CVS Caremark Corp., a pharmacy benefits manager (PBM), owed the federal government $95 million for overbilling Medicare Part D-sponsored drugs. The Court did not rule on the government's request for treble damages, leaving that issue for a later date after the parties have briefed it.
When Caremark handled Medicare Part D sponsored plans for Aetna Life Insurance Co., it allegedly overbilled for prescription drugs by charging the federal government more than what it paid pharmacies for the drugs. The overbilling led to Sarah Behnke filing a False Claims Act case against Caremark. Behnke, a former Aetna actuary turned whistleblower, alleged that Caremark's overbilling resulted in $240 to $330 million in damages, based on findings from 2012 and 2013. Caremark maintained that the higher drug prices resulted from market conditions.
The judge found that Caremark's actions artificially inflated the price of prescription drugs covered under Medicare Part D, which, in turn, led the Centers for Medicare & Medicaid Services (CMS) to overpay for the drugs. In his ruling, the judge awarded damages based on the relationships Caremark had with pharmacies Rite Aid and Walgreens, not with CVS Pharmacy, which is a separate entity. The federal government did not directly participate in the case. However, it filed a statement of interest citing its strong interest in ensuring that the Medicare Part D programs do not overpay for prescription drugs.
The case is United States ex rel. Sarah Behnke v. CVS Caremark Corp. et al., No. 2:14-cv-00824 (E.D. Pa.).
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
