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Greg Webb
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CVS to Pay $5M Plus Due to False Reporting of Prescription Drug Prices

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When CVS Caremark Corp. acquired RxAmerica in it’s acquisition of Longs Drug Stores, it also acquired a problem. According to the U.S. Department of Justice, CVS’ RxAmerica subsidiary reported false information about generic prescription drug prices in 2007 and 2008 to the Medicare program.

According to an October 15 article in The StarTribune by the Associated Press, this settlement resolves claims made in two different lawsuits filed in 2008 and 2009 against CVS Caremark Corp. CVS agreed to settle in order to “avoid protracted and expensive litigation.” In January 2012, CVS settled a similar suit filed by the Federal Trade Commission (FTC) by agreeing to pay $5 million.

The Centers for Medicare and Medicaid Services displayed this information on its website, PlanFinder, in order for Medicare participants and Medicaid recipients to calculate the cost of their medications; however, the actual prices people were charged were higher—some significantly—and therein lays the rub. That is breaking the law, and just plain wrong to boot.

Loretta Lynch, U.S. Attorney for the Eastern District of New York, stood up for seniors and people with disabilities who must navigate the Medicare system, saying they deserve accurate information in order to make informed decisions about their care vis à vis prescription drug costs.

One wonders how much this goes on only not to be discovered. At lease in this instance, it did not pay (in the end at least) to report false information to the government.