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Investing.com -- CVS Pharmacy has agreed to pay $12.25 million to settle allegations that it overcharged Massachusetts’ Medicaid program by not offering the same discounted prices available to cash-paying customers.
Massachusetts Attorney General Andrea Joy Campbell announced the settlement on Wednesday, resolving claims that CVS charged MassHealth higher prices than those offered to the general public for identical medications.
"When pharmacies overcharge MassHealth, they’re undermining the integrity of our public programs and leaving taxpayers to foot the bill," said AG Campbell.
The settlement stems from an April 2025 lawsuit alleging CVS offered lower drug prices to cash-paying customers through a discount program run by ScriptSave while failing to report and bill MassHealth at these lower rates.
According to the complaint, CVS violated Massachusetts’ "Most Favored Nation" drug pricing regulation, which has been in effect since 1995 and requires pharmacies to charge MassHealth the lowest price offered to any other customer.
The Attorney General’s office claimed CVS contracted with ScriptSave to administer discount card programs for former customers of CVS’s Health Savings Pass program and former Target pharmacies acquired by CVS. Customers with these ScriptSave discount cards often received lower prices than those charged to MassHealth.
Beyond the financial payment, CVS will implement a yearly reconciliation process to review prescription drug pricing for MassHealth members, ensuring the program isn’t overcharged in the future.
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