CVS Health's Omnicare Ordered to Pay $948.8 Million in Prescription Fraud Case

CVS Health's Omnicare has been ordered to pay $948.8 million over invalid prescriptions. The company is a leading American supplier of health products and services, with net sales broken down into medical insurance plan management services, medical benefits management, retail distribution, and other activities.

A federal judge has ordered CVS Health's Omnicare unit to pay $948.8 million in penalties and damages following a whistleblower lawsuit alleging fraudulent billing of the U.S. government for invalid drug prescriptions. The ruling, made by U.S. District Judge Colleen McMahon in Manhattan, comes after a lengthy legal battle that began in 2015.

The lawsuit, filed by former Omnicare pharmacist Uri Bassan and joined by the federal government, accused Omnicare of improperly billing Medicare, Medicaid, and Tricare for prescriptions at long-term care facilities. The company allegedly assigned new prescription numbers without necessary paperwork and pharmacist approvals, after the original prescriptions expired or ran out of refills.

Judge McMahon imposed a $542-million penalty for filing 3,342,032 false claims between 2010 and 2018, and awarded $406.8 million in damages, representing three times the $135.6 million awarded by a jury in April 2025. The tripling of damages was required under the federal False Claims Act, which allows whistleblowers to sue on behalf of the federal government and share in recoveries.

The judge rejected CVS' argument that the $948.8-million award violated the U.S. Constitution's prohibition against excessive fines under the Eighth Amendment. McMahon found CVS jointly liable with Omnicare for $164.8 million of the penalties, after jurors found it failed to stop Omnicare from submitting 30% of the false claims after buying the company in 2015.

CVS Health has announced plans to appeal the judgment. The company maintains that the lawsuit centered on a highly technical prescription recordkeeping issue that was allowed by law in many states. "There was no claim in this case that any patient paid for a medication they shouldn't have or that any patient was harmed," CVS said in a statement.

The ruling highlights the ongoing challenges faced by the healthcare industry in ensuring compliance with complex regulatory requirements. It also underscores the importance of robust internal controls and oversight mechanisms to prevent and detect fraudulent activities.

References:
[1] https://www.reuters.com/legal/government/judge-orders-cvs-omnicare-unit-pay-949-million-over-invalid-prescriptions-2025-07-08/