Federal Judge Saddles CVS Caremark with $95 Million Judgment

August 1, 2025
Hall Benefits Law, LLC

A federal judge in Pennsylvania recently issued a ruling finding that CVS Caremark Corp., a pharmacy benefits manager (PBM), owed the federal government $95 million for overbilling Medicare Part D-sponsored drugs. The Court did not rule on the government’s request for treble damages, leaving that issue for a later date after the parties have briefed it.

When Caremark handled Medicare Part D sponsored plans for Aetna Life Insurance Co., it allegedly overbilled for prescription drugs by charging the federal government more than what it paid pharmacies for the drugs. The overbilling led to Sarah Behnke filing a False Claims Act case against Caremark. Behnke, a former Aetna actuary turned whistleblower, alleged that Caremark’s overbilling resulted in $240 to $330 million in damages, based on findings from 2012 and 2013. Caremark maintained that the higher drug prices resulted from market conditions.

The judge found that Caremark’s actions artificially inflated the price of prescription drugs covered under Medicare Part D, which, in turn, led the Centers for Medicare & Medicaid Services (CMS) to overpay for the drugs. In his ruling, the judge awarded damages based on the relationships Caremark had with pharmacies Rite Aid and Walgreens, not with CVS Pharmacy, which is a separate entity. The federal government did not directly participate in the case. However, it filed a statement of interest citing its strong interest in ensuring that the Medicare Part D programs do not overpay for prescription drugs. 

The case is United States ex rel. Sarah Behnke v. CVS Caremark Corp. et al., No. 2:14-cv-00824 (E.D. Pa.).

HBL has experience in all areas of benefits and employment law, offering a comprehensive solution to all your business benefits and HR/employment needs. We help ensure you are in compliance with the complex requirements of ERISA and the IRS code, as well as those laws that impact you and your employees. Together, we reduce your exposure to potential legal or financial penalties. Learn more by calling 470-571-1007.

The following two tabs change content below.

Hall Benefits Law, LLC

HBL offers employers comprehensive legal guidance on benefits in mergers and acquisitions, Employee Stock Ownership Plans (ESOPs), executive compensation, health and welfare benefits, healthcare reform, and retirement plans. We counsel a wide spectrum of clients including small, mid-sized, and large companies, 401(k) investment advisors, health insurance brokers, accountants, attorneys, and HR consultants, just to name a few. HBL is passionate about advising clients, and we are dedicated to our mission: to provide comprehensive, personalized, and practical ERISA and benefits legal solutions that exceed client expectations.

Latest posts by Hall Benefits Law, LLC (see all)