CVS Faces $289M Legal Blow as Shares Dip 0.21% Amid 298th Rank in Daily Trading Volume

On August 20, 2025, CVS Health (CVS) closed at $70.83, down 0.21% with a trading volume of $350 million, ranking 298th in market activity for the day. The stock faced renewed regulatory scrutiny as a federal judge ordered its pharmacy benefit manager subsidiary, Caremark, to pay $289.9 million in damages and penalties for allegedly overcharging Medicare on prescription drugs between 2013 and 2014. The ruling, issued by Philadelphia-based Chief Judge Mitchell Goldberg, tripled initial damages awarded in June, citing evidence of "financially motivated" fraud under the False Claims Act.

The case stems from a 2014 whistleblower lawsuit filed by former Aetna actuary Sarah Behnke, who accused Caremark of manipulating drug cost reports to inflate Medicare Part D reimbursements. Goldberg found the company exhibited "reckless disregard" despite not establishing "actual knowledge" of the scheme. The judge also imposed $4.87 million in civil penalties, with post-judgment interest now accruing on the total award. CVS acknowledged the ruling "in our favor on certain issues" but announced plans to appeal, emphasizing its belief that penalties exceed the $95 million overcharge initially determined.

The verdict adds to regulatory risks for the retail pharmacy giant, which has faced multiple lawsuits in recent years. While the company maintains its compliance with reporting standards, the ruling highlights vulnerabilities in its pharmacy benefit management (PBM) operations. Legal experts note the decision could embolden future whistleblower actions, as the False Claims Act allows relators to claim 15-30% of recoveries. The financial impact remains uncertain pending an appeal, though the liability could strain short-term liquidity and investor sentiment.

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