Retail pharmacy giant CVS has been accused of improperly reporting drug prices to the Medicare agency, a recently unsealed lawsuit has revealed.
The 2014 lawsuit (PDF), filed by a senior actuary at Aetna, claims CVS Caremark billed the Centers for Medicare & Medicaid Services more for Part D drugs than it paid to retail pharmacies in the insurer's network, and kept the remaining difference. The complaint alleges that CVS failed to report the higher prices to CMS despite federal regulations requiring PBMs to report "pass-through" prices.
Aetna's Head Actuary for Medicare Part D, Sarah Behnke, claims the fraudulent claims cost Medicare and patients more than $1 billion, beginning as early as 2007. CVS has denied the allegations, which come to light during a proposed and controversial merger between the two entities.
"We believe this is a massive fraud, carefully orchestrated to keep hidden a substantial PBM spread on generic drugs in the Part D program," Susan Schneider Thomas of Berger & Montague, one of the lead lawyers on the case, said.
The government indicated April 2 that it will not intervene in the case at this time, but Thomas said the allegations shine a light on the secrecy of PBM pricing.
"We are excited about the prospect of bringing these costly PBM practices into the public eye, and breaking the conspiracy of silence that the PBMs have long imposed on other participants in the industry," she added.