CVS Caremark, the pharmacy benefits manager (PBM) for CVS, has filed a notice of appeal of a $290 million judgment in a lawsuit alleging that it overbilled for Medicare Part D-sponsored drugs. The judgment was increased from $95 million to $290 million in August 2025 in an order from a Pennsylvania federal district court that included treble damages for Caremark’s “serious” misconduct under the False Claims Act. The judge increased the damages in large part because of Caremark’s “financially motivated” fraud, rather than an innocent or mistaken belief.
Whistleblower and former Aetna head actuary Sarah Behnke filed suit against Caremark in 2014, alleging that Caremark overbilled the federal government by $240 to $330 million. Behnke alleged that Caremark violated federal law that requires PBMs to report “pass-through” prices, leading to millions in fraudulent Medicare claims dating back to 2007. Caremark purportedly failed to report its Generic Effective Rate (GER) guarantees with various pharmacies, which are meant to hold down the price of generic drugs, to the Centers for Medicare & Medicaid Services (CMS). Caremark reportedly charged CMS for the drugs at higher prices than its GERs at Rite Aid, Walgreens, and CVS.
The case is U.S. ex rel. Sarah Behnke v. CVS Caremark Corp. et al., case number 2:14-cv-00824, U.S. District Court for the Eastern District of Pennsylvania. The appeal is pending before the U.S. Court of Appeals for the Third Circuit.
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