CVS Health will pay nearly $38 million to resolve U.S. allegations that it sought improper reimbursements by supplying diabetic patients with more insulin pens than their prescriptions required. Federal prosecutors in New York said the conduct stretched across ten years and led Medicare, Medicaid and other public health programs to cover refills earlier than allowed.
The settlement ends a long-running investigation into how CVS pharmacies handled insulin pens, a product that has complicated billing rules because of varied dosing, carton packaging and shifting insurance limits.
Whistleblower complaint set case in motion
According to prosecutors, CVS encouraged pharmacy employees to record the highest possible days-of-supply when dispensing full cartons of insulin pens. That practice allowed the company to fill new orders sooner and submit claims that government insurers later reimbursed. Officials say the approach also hid the true quantity of insulin dispensed at the store level.
Insulin pens are widely used by people with diabetes who need precise daily doses, and federal programs pay billions each year for their distribution.
The agreement directs $24.45 million to the federal government, with the remainder going to participating states. CVS, which is based in Rhode Island, said billing difficulties surrounding insulin pens have existed for years because payors and manufacturers use different systems for calculating supply. The company said recent changes in pharmacy benefit management have improved consistency and that the settlement allows it to move forward.
The Justice Department’s case stemmed from several whistleblower lawsuits, including one filed in 2018 by CVS pharmacist Adam Rahimi. Whistleblowers will collectively receive 19.5% of the settlement amount, with Rahimi earning the largest share.
The case adds to a growing list of federal enforcement actions targeting pharmacies and health providers accused of inflating or accelerating prescription claims.