August 4, 2025
A New York federal judge recently ordered Omnicare to pay $949 million in a False Claims Act (FCA) case. The decision is notable given the amount of statutory penalties assessed by the judge pursuant to 31 U.S.C. §§ 3729(a)(1)(A). In addition, Omnicare’s corporate parent, CVS Health Corp. (CVS), was held jointly and severally liable for a portion of the statutory penalties.
In 2015, former Omnicare pharmacist, Uri Bassan, initiated a whistleblower lawsuit under the qui tam provisions of the False Claims Act. Thereafter, in 2019, the government intervened in the matter. According to the complaint, Omnicare improperly billed Medicare, Medicaid, and Tricare for prescriptions for tens of thousands of patients. Omnicare allegedly assigned new prescription numbers without necessary paperwork and pharmacist approvals after original prescriptions expired or ran out of refills.
In April 2025 after a four-week trial, a New York federal jury found that Omnicare, Inc. (“Omnicare”) had submitted 3,341,032 false claims over an eight year period. The jury further found that CVS “caused” the submission of 1,016,039 of those false claims following its acquisition of Omnicare in August 2015. The jury also determined that the Government sustained $135,592,814.70 in single damages as a result of Omnicare’s conduct. However, the jury concluded that CVS’s conduct did not cause the Government any money damages. According to a statement issued by the U.S. Attorney for the Southern District of New York, it was one of the largest damages awards by a jury in an FCA case.
The FCA provides for “a civil penalty of not less than $5,000… for every violation of the False Claims Act.” 31 U.S.C. §§ 3729(a)(1)(A), In this case, Omnicare, Inc. and CVS were found to have submitted or caused the submission of 3,341,032 and 1,016,039 in false claims, respectively. If applied strictly, this would have resulted in a minimum penalty of approximately $26.9 billion for Omnicare alone, on top of treble damages.
The Government, however, sought a significantly lower, though still substantial, amount of $542 million in statutory penalties against Omnicare and $164.8 million against CVS. The court acknowledged that a strict application of the FCA’s penalty provision would raise Eighth Amendment concerns about excessive fines. The court, however, rejected CVS’s argument that the penalties suggested by the government would violate the U.S. Constitution’s prohibition against excessive fines under the Eighth Amendment. Ultimately, the court imposed the requested statutory penalties of $542 million on Omnicare and found CVS jointly and severally liable for $164.8 million. The Judge also trebled the $135.6 million in damages for a total award of $949 million.
This was a very big fraud on the government, one that lasted over almost a decade, and one that Omnicare was aware of but avoided taking steps to correct.
-Judge McMahon in announcing the decision