JHVEPhoto/iStock Editorial via Getty Images CVS Health ( NYSE: CVS ) and its pharmacy benefits manager, Caremark, have reportedly agreed to pay at least $45M to settle allegations that the healthcare giant didn't pass rebates paid by drugmakers to the state of Illinois over a recent four-year period. Citing a contract signed between CVS ( CVS ) and the Illinois Department of Central Management Services in 2015, STAT News reported that the company was expected to send the rebates it negotiated with drug manufacturers to the state. However, according to a June 24 settlement agreement, Illinois Attorney General Kwame Raoul has started an investigation over concerns that CVS ( CVS ) failed to do so.
Raoul also noted that Caremark didn't sufficiently disclose to the state the type of relationships it had with other CVS entities. The settlement marks the latest in a series of regulatory setbacks that PBMs, also known as pharma middlemen, have faced in recent weeks. A recent investigation by the House Committee on Oversight and Accountability found that PBMs drive patients towards costlier medicines and their affiliated pharmacies, reducing patient choices and leading to higher spending.
Its report was released on Tuesday before executives of the three largest PBMs, including CVS Caremark's President David Joyner, testified before the Republican-led committee. More on CVS Health CVS Health: Downgrading To Hold As FTC Regulatory Scrutiny Ramps Up CVS Health: A Better Investment Than Walgreens Boots Alliance CVS Health: Good Buy Vs. Goodbye Top PBM execs to testify before House Oversight Committee Dividend Roundup: Procter & Gamble, Costco, CVS Health, Colgate-Palmolive, and more.
