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A federal judge tripled damages against the pharmacy benefits manager after finding it encouraged inflated Medicare drug claims and underpaid pharmacies.
Following an eight-day bench trial, a judge has issued a final judgement ruling that pharmacy benefits manager Caremark—a subsidiary of CVS Health—must pay $289.9 million in damages to Sarah Behnke, in a False Claims Act whistleblower case.1 Caremark plans to appeal the decision.
In June, the court had originally ruled that the PBM had encouraged insurers—including Behnke’s former employer, Aetna—to submit inflated drug claims to the federal government that dated back to 2010.2
Behnke also had claimed that Caremark was underpaying pharmacies such as Walgreens and Rite Aid for medications. She had originally filed the lawsuit in 2014, several years before CVS Health had even completed its acquisition of Aetna in 2018.2
The initial damages during the June ruling had been set at $95 million, but those have since tripled, with the breakdown being:
In other words, the defendants were liable for false and inflated drug prices that had been reported to the government for prescriptions filled for Medicare Part D beneficiaries, resulting in the federal government overpaying these generics.
According to the court, the $4.8 million represents a per-claim penalty "near the top of the statutory range" of $5,500 to $11,000, given the fact that "Caremark's misconduct was serious." CVS had claimed that Behnke’s allegations were not fully supported, arguing that the original $95 million penalty was sufficient. Despite the argument, Judge Mitchell Goldberg felt that fraudulent Medicare claims were going to undermine public trust in the Centers for Medicare & Medicaid Services (CMS).
"This is a terrific outcome for our client and the US government and taxpayers," said Executive Shareholder David F. Sorensen, who led Berger Montague's trial team, the led law firm representing Behnke.
The court found that the Caremark defendants were liable for false and inflated drug prices that had been reported to the government for prescriptions filled for Medicare Part D beneficiaries at two national chain pharmacies (Walgreens and Rite Aid), causing the federal government to overpay for these generic drugs.
The latest ruling is among a flurry of legal battles taking place within the pharma industry. Recently, Texas filed a lawsuit3 against Eli Lilly over bribery allegations, claiming that Lilly used various practices to illegally induce medical providers in the state to prescribe Lilly’s products instead of its competitors. The complaint called out two programs that Lilly provided for HCPs: a free nurses program and reimbursement support service.
Lilly is denying these allegations.
“Big Pharma compromised medical decision-making by engaging in an illegal kickback scheme,” said Texas State Attorney General Ken Paxton. “Eli Lilly fraudulently sought to maximize profits at taxpayer expense and put corporate greed over people’s health. I will not stand by while corporations unlawfully manipulate our healthcare system to line their own pockets.”
Separately, GSK has reached an mRNA patent settlement4 with BioNTech, CureVac, and Pfizer, ending US litigation over COVID-19 and influenza vaccines. The deal reduces GSK’s future royalty obligations on its mRNA programs and could pave the way for a global resolution following BioNTech’s planned CureVac acquisition. No liability was admitted by any party.
Among the main settlement terms, BioNTech will pay GSK $370 million upfront and 1% royalties on US sales of licensed products from Jan. 1, 2025, along with $130 million and 1% royalties on rest-of-world sales following the closing of the deal.
Meanwhile, CureVac will receive $370 million at closing, along with $50 million from GSK for monetizing a portion of US product royalties due under its existing license agreement.
References
1. Pharmacy Benefits Manager Caremark Must Pay $290 Million After Trebled Damages and Assessed False Claims Act Penalties. PR Newswire. August 21, 2025. Accessed August 22, 2025. https://www.prnewswire.com/news-releases/pharmacy-benefits-manager-caremark-must-pay-290-million-after-trebled-damages-and-assessed-false-claims-act-penalties-302535821.html
2. Pennsylvania judge hits CVS with $289M fine in whistleblower suit. Fierce Healthcare. August 21, 2025. Accessed August 22, 2025. https://www.fiercehealthcare.com/payers/pennsylvania-judge-hits-cvs-289m-fine-whistleblower-suit
3. Hollan M. Texas Sues Eli Lilly for Allegedly Bribing Providers to Prescribe Drugs. Pharmaceutical Executive. August 13, 2025. Accessed August 22, 2025. https://www.pharmexec.com/view/texas-sues-eli-lilly-allegedly-bribing-providers-prescribe-drugs
4. Tracy D. GSK Gains $370 Million Upfront, Reduced Royalties in CureVac mRNA Patent Settlement Agreement with Pfizer, BioNTech. Pharmaceutical Executive. August 8, 2025. Accessed August 22, 2025. https://www.pharmexec.com/view/gsk-gains-370-million-upfront-reduced-royalties-curevac-mrna-patent-settlement-agreement-pfizer-biontech
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