Philadelphia, August 20, 2025 - A federal judge has ruled that CVS Caremark, the pharmacy benefit manager owned by CVS Health, must pay $289.9 million for overcharging Medicare Part D.

The court found that the company intentionally inflated prescription drug costs it reported to the government, while at the same time paying partner pharmacies, including Rite Aid and Walgreens, much less. The judge ruled this was not an innocent mistake but a case of fraud driven by profit.

How the Case Started

The case began in 2014 when Sarah Behnke, a former Medicare actuary at Aetna, filed a whistleblower lawsuit. She accused CVS Caremark of providing false drug cost data to the Centers for Medicare & Medicaid Services (CMS). Because CMS relies on this information to set reimbursement rates, any false reporting can lead to huge financial losses for Medicare.

Judge’s Decision

U.S. District Judge Mitchell Goldberg ruled that Caremark’s actions were financially motivated and serious enough to trigger the False Claims Act, which allows damages to be tripled in fraud cases.

The company was ordered to pay about $285 million in tripled damages.

An additional $4.87 million civil penalty was added, bringing the total to $289.9 million.

CVS Caremark’s Response

CVS Caremark said it plans to appeal the ruling. The company argues that its payment practices were consistent with industry standards and that it did not intend to cheat the Medicare system.