After ten years of contentious litigation, a New York jury found Omnicare, a CVS Health Corporation subsidiary, liable for dispensing drugs without valid prescriptions to patients in assisted living and long-term care facilities. In United States v. Omnicare, Inc. the jury also found CVS liable for causing Omnicare to submit false claims for reimbursement.
Overview of the Lawsuit
The case began in 2015, when a whistleblower and the U.S. government accused Omnicare of providing prescription drugs to tens of thousands of residents across more than 3,000 long-term care facilities, despite having invalid and expired prescriptions.
In May 2020, Omnicare and CVS sought to dismiss the claims, arguing that the regulation prohibiting companies from dispensing drugs without valid prescriptions only took effect in 2013, after Omnicare had filled such prescriptions. However, the Southern District Court of New York rejected this argument, holding that the government had sufficiently alleged that the reimbursements after 2013 were false, and that it was illegal for Omnicare to dispense and subsequently bill CMS for invalid prescriptions.
On April 29, 2025, the jury found Omnicare and CVS liable for submitting more than three million false claims, totaling $135.6 million, marking one of the largest jury verdicts under the False Claims Act (“FCA”) to date. CVS plans to appeal, maintaining that their dispensing practices were consistent with industry norms and permitted under many state laws, and that no patients were harmed.
Lessons for Healthcare Providers
The jury’s finding shows the importance for healthcare providers and business owners to stay vigilant and seek legal guidance when navigating new government programs and regulatory frameworks. Engaging legal counsel early, especially when participating in federal healthcare programs, can help prevent inadvertent violations and reduce exposure to significant penalties by demonstrating good faith efforts to comply with applicable laws.
Frier Levitt is a highly experienced law firm dedicated to serving physicians, long-term care pharmacies, and other providers in the healthcare and life sciences industries. Frier Levitt routinely represents healthcare and life sciences clients with government investigations and litigation, including matters involving the FCA. If you are a healthcare professional and you or your practice is the subject of a government investigation or prosecution, please contact us for assistance.
Frier Levitt provides strategic, industry-focused legal counsel tailored to your needs. Contact our team today to learn how we can help you.
