A New York federal judge has significantly increased the financial penalty in the False Claims Act (FCA) case against Omnicare Inc. and its parent company CVS Health Corp., raising the combined judgment to $949 million. This follows a jury finding that the companies submitted millions of false prescription claims related to drugs dispensed to long-term care patients.
In April, the jury determined that Omnicare submitted approximately 3.3 million false claims between 2010 and 2018, with CVS Health participating in around 30% of those claims. U.S. District Judge Valerie E. Caproni tripled the original $136 million jury-awarded damages against Omnicare to $406 million, in accordance with FCA requirements. Additionally, Judge McMahon imposed $542 million in penalties on Omnicare and held CVS jointly liable for 30.4% of that amount.
“While this is a substantial sum, it reflects the severe and prolonged nature of the fraud against the government, which Omnicare knowingly failed to address for nearly a decade,” the judge stated.
The ruling reaffirmed the government’s requested 4-to-1 penalty-to-damages ratio, rejecting claims by Omnicare and CVS that Supreme Court precedent limits punitive damages in this case. The judge clarified that the case involves government overcharges subject to the Eighth Amendment’s excessive fines clause, which differs from punitive damages limitations discussed in the referenced Supreme Court decision.
The lawsuit, originally filed by whistleblower Omnicare pharmacist Uri Bassan in 2015, accused the company of dispensing medications under invalid or expired prescriptions and billing various healthcare programs improperly. The federal government intervened in 2019 to pursue its own claims.
CVS Health has denied any wrongdoing, emphasizing that no patients were harmed and disputing the constitutionality of the penalties. The company plans to appeal the decision.
The U.S. Attorney’s Office for the Southern District of New York represents the government, while Omnicare and CVS are defended by Williams & Connolly LLP.
