CVS Lawsuit: Why Is The Drugstore And Pharmacy Retailer Being Sued By The Government?

The U.S. Department of Justice has filed a lawsuit against CVS Health (CVS) and its business unit, Omnicare, for government billing fraud, which it claims was allegedly performed by the company for patients without valid drug prescriptions.

In the suit, the DOJ alleges the Omnicare violated the False Claims Act by illegally dispensing drugs to patients in assisted living facilities, group homes, and other long-term care facilities. The claim suggests that tens of thousands of patients were given prescriptions by Omnicare by assigning a new number to the prescription after it expired or no longer had any refills left.

According to the DOJ, this allowed Omnicare to bill Medicare, Medicaid, and Tricare for “rollover” prescriptions from 2010 to 2018. The prescribed drugs included anticonvulsants, antidepressants, and antipsychotic drugs, which the agency said, in some instances, had dangerous side effects that require doctor supervision.

“As alleged, Omnicare put at risk the health of tens of thousands of elderly and disabled individuals living in assisted living and other residential long-term care facilities by dispensing drugs for months, and sometimes years, without obtaining current, valid prescriptions from doctors,” Manhattan U.S. Attorney Geoffrey S. Berman said in a statement.

“A pharmacy’s fundamental obligation is to ensure that drugs are dispensed only under the supervision of treating doctors who monitor patients’ drug therapies. Omnicare blatantly ignored this obligation in favor of pushing drugs out the door as quickly as possible to make more money.

“This Office will continue to hold accountable those who put at risk people’s health and safety just to turn a profit,” he added.

The DOJ is seeking civil penalties and other damages in the case. Omnicare operates 160 pharmacies in 47 states across the U.S.

Shares of CVS stock were down 0.22% as of 2:44 p.m. EST on Wednesday.