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Diving brief:
CVS has agreed to pay nearly $38 million to settle allegations that its pharmacies overcharged the government for insulin pens over a decade, delaying 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 misreported the amount of insulin their pharmacies dispensed to avoid detection, according to the Department of Justice.
Approximately $25 million of the settlement will be paid to the US government, with the remainder split between different states. CVS, which pleaded guilty as part of the deal, said in a statement to Healthcare Dive that it was happy to put the matter behind it.
Insight Diving:
Insulin pens are a commonly used tool for diabetics to control blood sugar. on Three-fifths of Americans have diabetes Use pens, which are usually distributed in cartons of five pens, and each pen contains 300 ml of insulin.
When pharmacies dispense insulin pens to patients in government programs such as Medicare or Medicaid, they are required to report certain data, such as the amount dispensed and how many days the supply will last. Plans’ pharmacy benefit managers typically deny claims that exceed certain limits, or for early refills or full cartons, which can exceed days-of-supply limits.
But CVS intentionally exceeded these limits in order to make false claims According to the government’s complaint. Specifically, CVS required pharmacy staff to report the maximum days of supply allowed under a patient’s coverage when dispensing full insulin vials, which was often less than the amount actually dispensed. As a result, prescriptions were refilled prematurely, leading to some patients accumulating huge amounts of unused insulin.
Although audits found repeated violations of distribution rules, CVS pharmacies did not stop the practice, the Justice Department said.
“While we do everything we can to ensure patients get the medications they need, insulin pen billing has long been a challenge for pharmacies,” a CVS spokesperson said via email, citing changes in labeling, the lack of single pen refill options, fluctuating insulin doses and varying plan supply limits that make billing complicated.
“In recent years, the evolution of PBM practices, the drive to account for insulin pen refills, and other technological improvements have helped alleviate some of these challenges. “With this settlement, we are pleased to put this case behind us and avoid the cost and expense of litigation,” they said.
It’s the latest in a series of sanctions imposed on the Woonsocket, Rhode Island-based health care giant this year. In August and July, CVS was ordered to pay a $290 million fine and a $949 million fine, respectively, for allegedly overcharging the U.S. government for prescription drugs. Most recently, the company agreed to multi-million dollar settlements in Massachusetts and North Carolina in over-prescription and “fake code” cases.
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