On June 25, 2025, Chief Judge Mitchell S. Goldberg of the U.S. District Court for the Eastern District of Pennsylvania issued a ruling in the case of U.S. ex rel. Sarah Behnke v. CVS Caremark Corp. et al., ordering CVS Caremark to pay the U.S. government $95 million. Relator Sarah Behnke brought a qui tam action in February 2014 under the False Claims Act against CVS Caremark Corporation and related entities. The relator alleged that Caremark caused certain health insurers to misrepresent to the government the amount they paid for prescription drugs on behalf of Medicare beneficiaries. The relator claimed that Caremark, a pharmacy benefits manager (PBM), contracted with pharmacies to pay a fixed average price for prescription drugs to pharmacies but caused higher prices to be reported by insurers. The ruling followed an eight-day bench trial in March 2025 that took place after the court ruled on the parties’ cross motions for summary judgment.
The court ruled that CVS Caremark violated the FCA by knowingly causing health insurers, such as Aetna, to submit claims for prescription drugs at inflated prices to Medicare Part D. Caremark was found to have reported higher maximum allowable cost prices to insurers which were then submitted to CMS while paying discounted average prices to pharmacies like Walgreens and Rite Aid, which “resulted in the overpayment of tens of millions of dollars.” Behnke, 2:14-cv-00824-MSG, at 57. The court determined that the relator satisfied her burden with regard to her presentment and false statement claims, but did not meet her burden on the reverse false claim cause of action.
The government did not intervene in this action but filed a statement of interest during summary judgment briefing explaining, in part, that “the United States has a strong interest in ensuring that the Part D program does not pay inflated drug prices and that the information that Plan Sponsors and their PBMs report to CMS reflects the true costs of the program.” Id. (quoting government’s Statement of Interest).
The $95 million award from the court is a partial judgment, with the court noting that the parties have not yet briefed the issue of treble damages or statutory penalties.
