BOSTON — Pharmacy giant CVS will pay $12.25 million to MassHealth after Massachusetts Attorney General Andrea Joy Campbell alleged the company charged the state’s Medicaid program higher prices for prescription drugs than those available to the general public.
The settlement, announced Wednesday, resolves claims that CVS failed to extend to MassHealth members the discounted drug prices it offered cash-paying customers through the ScriptSave program. State regulations require pharmacies to bill MassHealth no more than the lowest price charged to any other customer, a policy known as the “most favored nation” rule.
“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. She added the agreement would help prevent “future inaccurate price reporting” and ensure resources remain available for residents who rely on the program.
As part of the deal, CVS, based in Rhode Island, agreed to implement a yearly reconciliation process to review drug pricing and ensure that MassHealth is not overcharged in the future.
The complaint was filed jointly in May by attorneys general from Massachusetts, Connecticut, Indiana, and Oklahoma, following a whistleblower lawsuit in federal court in Washington, D.C.
CVS, in a statement, said the agreement is not “an admission of liability or wrongdoing” and was reached “to avoid the time and expense of further litigation.” Company spokesperson Kara Page noted the claims involved only Massachusetts’s unique pricing regulation and added that CVS has prevailed in many similar lawsuits across the country.
“The settled claims involve only Massachusetts Medicaid’s unique most favored nations (‘MFN’) regulation,” spokesperson Kara Page said. “We’ll continue vigorously defending against the claims concerning CVS Pharmacy’s usual and customary [U&C] pricing brought by remaining plaintiffs in the case. 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 settlement follows other recent enforcement actions by Campbell’s office aimed at prescription drug pricing practices. In July, Gilead Sciences agreed to pay $1.6 million to resolve allegations it paid improper kickbacks to promote HIV drugs.
