CVS to pay $5M to settle drug pricing allegations

WASHINGTON — The Department of Justice says a unit of CVS Caremark has agreed to pay over $5 million to settle allegations that it reported false prescription drug pricing data to the government’s Medicare program.

Federal investigators say CVS’ RxAmerica subsidiary reported false information about the prices of generic prescription drugs between 2007 and 2008. The Centers for Medicare and Medicaid Services incorporated this information in an online tool, which seniors could use to estimate their out-of-pocket drug expenses. Department of Justice officials say the actual drug prices were significantly higher than those submitted.

CVS, which is based in Woonsocket, R.I., said it agreed to the settlement to avoid protracted and expensive litigation. It noted the period in question came before it acquired RxAmerica through its takeover of Longs Drugs Stores.