CVS has agreed to a $12.25 million settlement with Massachusetts that resolves allegations that it charged members of its Medicaid program more for prescription drugs than they charged the general public.
In addition to the funds in the settlement, CVS agreed to an annual reconciliation process where they will make sure that prices charged to MassHealth members are on par with others to avoid future overcharges, according to an announcement from Attorney General Andrea Joy Campbell.
The AG’s office sued CVS in April, claiming that CVS offered lower prices at its pharmacies for cash-pay patients through an outside discount program administered by ScriptSave, but did not report those prices to MassHealth.
The suit was filed jointly by the attorneys general of Connecticut, Indiana and Oklahoma.
“When pharmacies overcharge MassHealth, they’re undermining the integrity of our public programs and leaving taxpayers to foot the bill,” Campbell said in a statement. “I am proud to announce this settlement, which will prevent future inaccurate price reporting and ensure MassHealth has the resources it needs to continue serving Massachusetts residents.”
MassHealth has a unique “most favored nation” policy in place that requires the lowest drug prices to be charged within the program. A spokesperson for CVS told Fierce Healthcare that the company is “pleased” to resolve the matter and noted that the settlement only relates to that MFN regulation.
The spokesperson added that the settlement is not an admission of guilt.
“We’ll continue vigorously defending against the claims concerning CVS Pharmacy’s usual and customary pricing brought by remaining plaintiffs in the case,” they said. “For the last several years, many pharmacies, including CVS Pharmacy, have been named as defendants in other U&C lawsuits accusing the pharmacies of having submitted inflated U&C prices.”
“In the cases involving CVS, we’ve prevailed many times, including by court dismissal, jury verdict and arbitrator award,” the spokesperson said.
The announcement said that Campbell is putting a focus on rooting out fraud, waste and abuse related to pharmaceutical pricing.
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