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CVS Caremark accused of $1 billion in Medicare drug fraud

Written by Diane Archer

Pharmacy benefits managers (PBMs)–middlemen who determine the list of approved drugs for health insurers and pay pharmacy claims– argue that they drive down drug prices. But, they also can drive drug prices up in a host of ways. StatNews reports on a whistleblower lawsuit that charges CVS Caremark, a pharmacy benefit manager, of reporting higher than actual generic drug prices to the federal government, defrauding taxpayers, Medicare and older adults and people with disabilities.

According to the Aetna actuary who filed the lawsuit, CVS Caremark overcharged people with Medicare enrolled in a Part D drug plan and the federal government for generic prescription drugs. Put differently, the price CVS Caremark paid pharmacies for generic drugs allegedly was less than it charged Aetna’s Medicare Part D plans. CVS Caremark pocketed the overpayments.

CVS Health claims the allegations of fraud are “without merit,” but, the whistleblower in this lawsuit discovered that people with Medicare in other Part D plans were paying less for generics than CVS Caremark was charging Aetna Part D plan members. Why would CVS Caremark not have been able to achieve the same low generic prices for Aetna’s Part D plan members as other Part D plans were able to get for their members? And, CVS Caremark charged Aetna Part D plan members significantly more–25 to 40 percent more.

CVS is currently in the process of buying Aetna. Had it owned Aetna at the time the lawsuit was filed, in 2014, Aetna’s actuary likely would have had no reason to look into the price discrepancy between what its members paid for generics and what other Part D plan members paid. Aetna would have benefited from the overcharges.

If Congress stepped in and allowed the federal government to negotiate prescription drug prices for everyone–effectively to set drug prices no higher than the average price of the seven wealthiest countries in the world–not only would it bring down drug prices for everyone by nearly 60 percent, but these types of taxpayer and consumer fraud would not be possible.

Here’s more from Just Care:

 

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