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Investing.com -- A federal judge ordered CVS Health (NYSE:CVS)’s pharmacy benefit manager unit to pay $95 million to the U.S. government for overcharging Medicare for prescription drugs.
Chief Judge Mitchell Goldberg in Philadelphia issued the ruling against CVS Caremark on Wednesday following an eight-day non-jury trial held in March. The judge will decide later whether to triple the award to $285 million under the federal False Claims Act after further briefing.
The case originated in 2014 when Sarah Behnke, former head actuary for Medicare Part D at Aetna, filed a whistleblower lawsuit. Behnke claimed that since 2010, CVS Caremark had caused health insurers, including Aetna, to submit inflated claims to the Centers for Medicare and Medicaid Services while paying pharmacies like Rite Aid (NYSE:US90274J5618=UBSS) and Walgreens less. CVS acquired Aetna in 2018.
In his 105-page decision, Judge Goldberg ruled that while CVS Caremark prevailed on some claims, the unit knowingly managed drug prices in a way that increased its margins and profits.
"Although it is true that Aetna had the ultimate responsibility to submit the claims, I disagree that this responsibility absolves Caremark of culpability," Goldberg wrote in his decision.
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