CVS Caremark Settles With Feds Over Drug Pricing Allegations

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Rhode Island-based pharmacy CVS Caremark (NYS: CVS) will pay more than $5.25 million to the Department of Justice to settle a civil case regarding incorrect pricing of generic drugs in 2007 and 2008, the company announced yesterday.

The investigation centered on Longs Drug Stores subsidiary RxAmerica and the Part D Medicare program. CVS Caremark acquired Longs Drug Stores in 2008. The government alleged that incorrect drug prices were given to the Centers for Medicare and Medicaid Services for certain generic drugs, and thus "RxAmerica received Medicare Part D payments for claims for the covered drugs at prices that in some cases were significantly higher than the pricing data RxAmerica submitted to CMS for use on Plan Finder."

As part of the agreement, RxAmerica has expressly denied any liability.

The $5.25 million settlement (plus costs and fees) also resolves complaints filed under whiste-blower provisions that let private individuals file suit for false claims to the United States and share in any recovery.

CVS says the settlement won't affect 2012 earnings. CVS says that the settlement was paid in order to prevent further litigation costs. CVS earlier this year agreed to pay $5 million to resolve similar claims with the FTC, according to the Department of Justice.

The article CVS Caremark Settles With Feds Over Drug Pricing Allegations originally appeared on

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