Judge orders CVS' Omnicare unit to pay $949 million over invalid prescriptions
In a Monday evening order, U.S. District Judge Colleen McMahon in Manhattan imposed a $542-million penalty for filing 3,342,032 false claims between 2010 and 2018.
McMahon also awarded $406.8 million of damages, representing three times the $135.6 million that a jury awarded on April 29.
The tripling was required under the federal False Claims Act, which lets whistleblowers sue on behalf of the federal government and share in recoveries.
CVS plans to appeal the judgment. The Woonsocket, Rhode Island-based drugstore chain and pharmacy benefits manager bought Omnicare in 2015. Omnicare has asked McMahon to throw out the case or grant a new trial.
"This lawsuit centered on a highly technical prescription dispensing recordkeeping issue that was allowed by law in many states," CVS said in a statement on Tuesday. "There was no claim in this case that any patient paid for a medication they shouldn't have or that any patient was harmed."
The lawsuit was filed in 2015 by Uri Bassan, a former Omnicare pharmacist in Albuquerque, New Mexico, and joined by the federal government in 2019.
They said Omnicare improperly billed Medicare, Medicaid, and Tricare, which serves military personnel, for prescriptions for tens of thousands of patients in assisted-living facilities, group homes for people with special needs, and other long-term care facilities.
Omnicare allegedly assigned new prescription numbers without necessary paperwork and pharmacist approvals, after the original prescriptions expired or ran out of refills.
McMahon rejected CVS' argument that a $948.8-million award violated the U.S. Constitution's prohibition against excessive fines under the Eighth Amendment.
"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.
McMahon found CVS jointly liable with Omnicare for $164.8 million of the penalties, after jurors found it failed to stop Omnicare from submitting 30% of the false claims after buying that company. CVS itself did not submit any claims.
The case is U.S. ex rel Bassan v. Omnicare Inc, U.S. District Court, Southern District of New York, No. 15-04179.
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