CVS Pharmacy has agreed to pay $12.25 million to Massachusetts to resolve a lawsuit brought by Attorney General (AG) Andrea Joy Campbell alleging the company overcharged the state’s Medicaid program, MassHealth, for prescription drugs. The settlement, announced August 27, 2025, ends a lawsuit initiated through an April 14, 2025, Complaint in which the Massachusetts AG’s Office said CVS offered lower “cash” prices to some customers through a third-party discount program but continued to bill MassHealth at higher rates — a practice the state says violated long-standing pricing rules.
CVS was accused of operating a ScriptSave-administered discount program that offered lower prices to cash-paying customers while failing to report those discounted prices when billing MassHealth. Massachusetts regulations require pharmacies to charge MassHealth no more than the lowest price offered to any other customer. According to AG Campbell, by not passing those lower prices through to MassHealth and by not properly reconciling pricing discrepancies, CVS caused the Medicaid program to pay more than legally required.
Under the settlement, CVS will remit $12.25 million to MassHealth and implement compliance measures intended to prevent similar overcharges going forward. The agreement requires CVS to adopt an annual reconciliation process to compare prices charged to MassHealth with prices offered to other customers, and to correct any discrepancies discovered through that process. Massachusetts officials framed the settlement as both a recovery for taxpayers and a systemic fix to protect the integrity of the state’s pharmacy reimbursement system.
CVS did not dispute the broader context of regulatory scrutiny the company faces on multiple fronts — from opioid litigation to state false-claims suits — but statements around this particular settlement emphasized resolution rather than admission of liability. In recent years, however, CVS has been the subject of numerous state and federal actions, with this most recent agreement with Massachusetts joining a string of settlements and litigated outcomes shaping how large pharmacy chains manage pricing, billing, and compliance for public programs.
Massachusetts officials said recovering funds and forcing procedural changes were both necessary to safeguard MassHealth and protect the interests of taxpayers. AG Campbell commented that when pharmacies fail to charge the Medicaid program the same low prices available to the public, it undermines public programs and shifts costs to taxpayers, a framing that reinforced the state’s push for both monetary recovery and tighter reconciliation procedures moving forward.
The key takeaway from this settlement is not necessarily the monetary amount, but more so the compliance terms it creates. This annual reconciliation obligation could expose similar pricing mismatches earlier and reveal more pricing discrepancies across the nation which may then lead to similar compliance procedures in other states. For states and payors watching pharmacy contracting and discount programs closely, the agreement signals that regulators, while still seeking monetary penalties against these large pharmacy chains, will press for structural changes that address the root causes of these discrepancies in an effort to eliminate their repetition moving forward.
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