Dive Brief:
CVS has agreed to pay almost $38 million to settle allegations that its pharmacies overcharged the government for insulin pens over a decade, putting to bed a Department of Justice lawsuit and several whistleblower cases over the claims.
From 2010 through 2020, CVS pharmacies refilled insulin products too early, dispensed more than patients needed and falsely underreported how much insulin its pharmacies dispensed to avoid detection, according to the DOJ.
Roughly $25 million of the settlement will be paid to the U.S. government, with the remainder split between various states. CVS, which did admit culpability as part of the deal, said in a statement to Healthcare Dive that it was glad to put the matter behind it.
Dive Insight:
Insulin pens are a commonly used tool for diabetic patients to control their blood sugar. About three-fifths of Americans with diabetes use the pens, which are normally dispensed in cartons of five, with each pen containing 300 mL of insulin.
When pharmacies dispense insulin pens to patients in government programs like Medicare or Medicaid, they’re required to report certain data, like the quantity dispensed and how many days the supply will last. Plans’ pharmacy benefit managers normally reject claims that exceed certain limits, are for premature refills or for full cartons, which can exceed days-of-supply limits.
But CVS knowingly skirted these limits in order to submit false claims, according to the government’s complaint. Specifically, CVS told its pharmacy staff to report maximum days-of-supply allowed under a patient’s coverage when dispensing full insulin cartons, which was often lower than the amount actually dispensed. As a result, prescriptions were refilled prematurely, leading some patients to accumulate massive quantities of unused insulin.
Despite audits finding frequent violations of dispensing rules, CVS pharmacies didn’t stop the practice, the DOJ said.
“While we do everything we can to ensure patients can access the medications they need, insulin pen billing has long been a challenge for pharmacies,” a CVS spokesperson said over email, citing labeling changes, no single pen packaging options, insulin dosing variability and varying plan supply limits that make billing complex.
“In recent years, the evolution of PBM and payor practices to account for insulin pen packaging and other technological enhancements have helped alleviate some of these challenges. With this settlement, we’re pleased to put this issue behind us and avoid the cost and expense of litigation,” they said.
It’s the latest in a string of penalties for the Woonsocket, Rhode Island-based healthcare giant this year. In August and July, CVS was ordered to pay a $290 million and a $949 million penalty respectively for allegedly overcharging the U.S. government for prescription drugs. More recently, the company agreed to multi-million dollar settlements in Massachusetts and North Carolina in overprescribing and “dummy code” cases.
