(December 20, 2011) — Rhode Island-based pharmacy and prescription drug management company CVS Caremark is set to pay nearly $20 million to settle claims that the company defrauded state pension systems in California, Florida, and Illinois.
According to the Los Angeles Times, the whistleblower lawsuits were filed by two former CVS Caremark pharmacists who accused the firm of reselling returned drugs, changing prescription orders to make them more expensive, and submitting false reports about how long it took to fill prescriptions. Despite the allegations, the California Public Employees’ Retirement System (CalPERS) hired Caremark in June to oversee a contract covering about 350,000 members of CalPERS’ PPO plan.
In reference to the whistleblower litigation alleging irregularities in Caremark practices, Ann Boynton, Deputy Executive Officer, CalPERS Benefit Programs Policy and Planning, said in a June release: “Neither CalPERS nor any of our officers or employees are party to the action, which we have carefully considered throughout our contract negotiations.”
Under terms of the settlements, CVS Caremark will pay nearly $7 million to CalPERS, $4 million to the state of Illinois, and $3 million to the state of Florida. Other money from the settlement went to plaintiff attorneys’ fees and costs, the Los Angeles Times reported.
CalPERS spokesman Bill Madison told The Sacramento Bee that the fund is “pleased that the suit’s been resolved” but declined further comment.