The case stems from a whistleblower lawsuit filed by a former Aetna actuary who alleged CVS Caremark manipulated drug pricing to inflate Medicare claims while underpaying pharmacies.

A U.S. federal judge has ordered CVS Caremark, the pharmacy benefits arm of CVS Health, to pay $95 million over allegations it overbilled Medicare for prescription drugs. 

The decision was made by Chief Judge Mitchell Goldberg in Philadelphia, following a bench trial held in March.

The case was first filed in 2014 by whistleblower Sarah Behnke, a former Aetna actuary for Medicare Part D. 

She claimed that Caremark’s pricing setup led insurers to submit inflated costs to Medicare while simultaneously underpaying major pharmacy chains, such as Walgreens and Rite Aid. 

Behnke’s allegations date back to at least 2010, when she claimed Caremark began using pricing tactics that inflated its profit margins.

In a 105-page ruling, Judge Goldberg acknowledged that while Aetna formally submitted the claims, Caremark still bore responsibility for the pricing mechanics. 

CVS, which acquired Aetna in 2018 for $69 billion, responded that it is disappointed with the decision and is weighing its next steps. While the court sided with the company on some of the claims, Caremark was still found liable on others.

The penalties may not stop at $95 million. 

Judge Goldberg noted that he would consider tripling the amount up to $285 million under the False Claims Act, which allows whistleblowers to sue on behalf of the U.S. government and receive a portion of the final payout. 

If the ruling stands, Behnke could receive between 15% and 30% of any recovered amount.

Although the Department of Justice did not formally intervene in the case, it previously indicated support in a 2023 court filing, citing concern about inflated Medicare Part D drug costs and the accuracy of pricing data reported by pharmacy benefit managers.

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