Judge slams CVS’ Omnicare with $949 million penalty for decade-long prescription fraud

• A federal judge ordered CVS’s Omnicare to pay $948.8M for fraudulently billing Medicare, Medicaid, and Tricare for invalid prescriptions over nearly a decade.
• Omnicare bypassed legal safeguards, submitting 3.3M false claims for expired or improperly documented prescriptions, exploiting vulnerable patients in long-term care.
• The penalty includes $406.8M in tripled damages and a $542M fine under the False Claims Act, although potential penalties could have reached $16.5B.
• Whistleblower Uri Bassan exposed the scheme in 2015, leading to DOJ involvement and revealing systemic corruption in corporate pharmacy practices.
• CVS denies wrongdoing, calling it a “technical” dispute, and plans to appeal despite the judge calling the fraud “deliberate and egregious.”

A federal judge has ordered CVS Health’s Omnicare unit to pay a staggering $948.8 million in penalties and damages for systematically defrauding U.S. taxpayers by billing Medicare, Medicaid, and Tricare for invalid drug prescriptions over nearly a decade. The ruling, handed down by U.S. District Judge Colleen McMahon in Manhattan, exposes a brazen scheme in which Omnicare, the nation’s largest long-term care pharmacy provider, allegedly circumvented legal safeguards to profit off expired or improperly documented prescriptions.

This landmark case, first brought by whistleblower and former Omnicare pharmacist Uri Bassan in 2015, reveals how corporate greed corrupted a system meant to protect vulnerable patients, including elderly and disabled individuals in assisted-living facilities. CVS, which acquired Omnicare in 2015, now faces the consequences of what Judge McMahon called a “very big fraud on the government,” one that persisted despite repeated internal warnings.

A decade of deception uncovered

Between 2010 and 2018, Omnicare filed more than 3.3 million false claims, according to court documents. The company allegedly bypassed legal requirements by assigning new prescription numbers to expired or unrefillable orders without proper pharmacist approvals or paperwork. In doing so, they effectively billed taxpayers for drugs that should never have been dispensed.

The jury initially awarded $135.6 million in damages in April 2025, but under the False Claims Act, a critical tool for combating government fraud, Judge McMahon tripled those damages to $406.8 million. She also imposed a $542 million penalty for the flood of fraudulent claims, bringing the total penalty to nearly $1 billion.

“This was a very big fraud on the government, one that lasted over almost a decade, and one that Omnicare was aware of but avoided taking steps to correct,” McMahon wrote in her scathing order.

CVS denies wrongdoing, vows appeal

CVS has defiantly rejected the ruling, framing the case as a “highly technical” record-keeping dispute rather than deliberate fraud. In a statement, the company claimed, “There was no claim in this case that any patient paid for a medication they shouldn’t have or that any patient was harmed.”

But McMahon dismantled that argument, noting that Omnicare employees and state regulators repeatedly flagged the illegal billing practices. Yet, the company refused to implement fixes. “The violations in this case were both deliberate and egregious,” she wrote.

Shockingly, CVS could have faced even harsher penalties. Under the False Claims Act’s minimum fine of $5,000 per false claim, Omnicare’s 3.3 million violations could have resulted in a staggering $16.5 billion penalty. McMahon acknowledged this while defending the $948.8 million judgment as justified.

Whistleblower exposes systemic corruption

The case began when Uri Bassan, a former Omnicare pharmacist in Albuquerque, New Mexico, blew the whistle on the company’s fraudulent billing practices in 2015. The U.S. Department of Justice joined the lawsuit in 2019, amplifying scrutiny of Omnicare’s dealings with federally funded healthcare programs.

Bassan’s complaint detailed how Omnicare exploited elderly and disabled patients in long-term care facilities, billing Medicare, Medicaid, and Tricare for prescriptions that lacked valid authorization. The scheme highlights a disturbing trend of corporate pharmacies prioritizing profits over compliance, with taxpayers footing the bill.

This ruling sends a clear message to healthcare corporations. Defrauding the government carries severe consequences. The False Claims Act, designed to empower whistleblowers and recover stolen taxpayer dollars, has once again proven vital in holding powerful entities accountable.

Yet CVS’s planned appeal suggests the battle is not over. The company insists the penalty is “unconstitutional,” despite McMahon’s firm rejection of that claim. Legal experts note that appeals in False Claims Act cases face steep odds, given the overwhelming evidence of wrongdoing.

For nearly a decade, Omnicare fleeced taxpayers while providing unchecked prescription services to society’s most vulnerable. Thanks to a courageous whistleblower and a resolute judiciary, justice has finally been served, at least for now.

But the fight is not over. As CVS prepares its appeal, taxpayers must remain vigilant against corporate fraudsters who view government healthcare programs as piggy banks to exploit. This case is a victory, but it is also a reminder that without relentless oversight, corruption will always find a way.

Sources for this article include:

Reuters.com

Finance.Yahoo.com

FierceHealthcare.com