A former Omnicare pharmacist filed the lawsuit in 2015 accusing the PBM of improperly billing Medicare, Medicaid and the military’s Tricare program for over $135 million in drugs that weren’t actually covered by the programs.
Omnicare — the largest long-term care pharmacy services provider in the U.S. — fraudulently dispensed drugs to elderly and disabled people in long-term care and assisted living facilities without valid prescriptions, according to the complaint.
The Department of Justice joined the suit in 2019, and a jury ruled in favor of the government last spring.
The False Claims Act allows whistleblowers to bring complaints on the government’s behalf and share in potential damages. The law is a key weapon in the government’s arsenal for combating fraud, and the driving force behind a major share of healthcare recoveries.
The law requires tripling of damages, a stipulation that inflated CVS’ penalty. The company argued that the $948.8 million award violates the Constitution’s prohibition against excessive fines, but McMahon did not agree.
“Admittedly [the fine] is a very big number. But this was a very big fraud on the Government, one that lasted over almost a decade, and one that Omnicare was aware of but avoided taking steps to correct,” the judge wrote.
And CVS is getting off relatively easy, McMahon noted. According to her order, following the letter of the FCA, which outlines a minimum penalty of $5,000 for every false claim, would result in an “astronomical” minimum penalty of $26.9 billion on top of the damages.
