The government also sought to recover damages under common law for payment by mistake of fact and unjust enrichment.

Just a few weeks after CVS Pharmacy Inc. agreed to pay $18.2 million dollars to resolve alleged violations of the federal and California False Claims Acts, on December 1, 2025, CVS has once again agreed to pay almost $37.76 million dollars to settle another civil fraud case brought against it by the Department of Justice.

By way of background, the United States government intervened in numerous qui-tam suits against CVS to recover damages and civil penalties arising from CVS’ alleged violations of the False Claims Act (FCA), 31 U.S.C. § 3729 et seq., in connection with their dispensing insulin pens to beneficiaries of government healthcare programs. U.S. v. CVS Pharm. Inc. et al., Case No. 18 Civ. 3047 (JGK), (S.D.N.Y. 2025, compl. filed Nov. 26, 2025). The government also sought to recover damages under common law for payment by mistake of fact and unjust enrichment. Compl. Paragraph 1, United States of America v. Doe, No. 123CR4567, (Franklin Mun. Ct. Feb. 2, 2023).

According to the complaint, the government alleges, more specifically, that from 2010 to 2020, CVS pharmacies:

• “Instructed its pharmacy staff simply to report the maximum days-of-supply allowed under the beneficiary’s plan when dispensing full insulin pen cartons, which was often lower than the actual days-of-supply dispensed" in order “to fill insulin prescriptions as quickly as possible and to ensure that reimbursement for claims for insulin pens were not rejected.”
• “Did not internally document and use the actual days-of-supply dispensed to determine when patients could next refill their prescription.”
• Routinely refilled prescriptions prematurely, dispensing substantially more insulin to government healthcare program beneficiaries than was needed and substantially sooner than needed according to their prescriptions.
• Via phone calls from staff and its auto-refill program, prompted customers to come in and pick up premature refills.
• Its management, for years, was aware that it was over dispensing insulin because of premature refills and failed to take appropriate action to correct the issue.
• Received millions of dollars for insulin pen refills that were ineligible for reimbursement.

In addition, pharmacy benefit manager audits repeatedly found violations of dispensing rules, including overbilled quantity, incorrect/invalid days-of supply, refilling too soon and exceeding quantity limit/overfill quantity, which resulted in chargebacks to CVS. From 2010 to 2020, approximately 6,300 CVS pharmacies had negative audits with at least one final audit violation related to insulin pens. Some of these pharmacies were audited multiple times and were cited with the same violations, and thus, if repeat audits of the same pharmacies are included, the total number of audits with violations in connection to insulin pens spikes to over 14,000. Thus, it’s hard for CVS pharmacies to argue this was not an intentional practice at their pharmacies.

In the stipulation and order of settlement and dismissal, CVS admits, acknowledges and accepts responsibility for being overpaid by government healthcare programs, over dispensing and refilling prescriptions too soon.

For More Information

If you have any questions about this Alert, please contact Jonathan L. Swichar, Bradley A. Wasser, Nikki Baniewicz, any of the attorneys in our Pharmacy Litigation Group or the attorney in the firm with whom you are regularly in contact.

Disclaimer: This Alert has been prepared and published for informational purposes only and is not offered, nor should be construed, as legal advice. For more information, please see the firm's full disclaimer.