For Immediate Release - August 30, 2010

Attorney General Martha Coakley Recovers $2.65 Million for Commonwealth From CVS Pharmacy as a Result of Prescription Overcharges

Cities and towns across Commonwealth to receive restitution and more than $1.3 million is recovered for Commonwealth's taxpayers

BOSTON - Attorney General Martha Coakley's Office has entered into an agreement with pharmacy chain CVS Pharmacy, Inc., after an investigation revealed that the company was overcharging public entities for various prescription drugs under the workers compensation insurance system. Under the terms of the settlement, filed late last week in Suffolk Superior Court, CVS will make a payment to the Commonwealth and to approximately 200 cities and towns in Massachusetts totaling $2.65 Million.

The city of Boston will receive $60,000 in restitution, and the cities of Brockton, Lowell, Fall River, and Springfield will each receive refunds in excess of $10,000. Other cities and towns will receive lesser amounts, based on the volume of overcharges applicable to those towns. On average, the municipalities will receive approximately $4,500 each.

"Towns and cities are under a great deal of economic stress, and every dollar counts," said Attorney General Martha Coakley. "Here, the towns and cities were overcharged for prescription drug purchases. Through today's action, we have recovered that money directly back to the cities and towns, returned more than $1.3 million for Massachusetts' taxpayers, and worked to prevent such overcharges from happening in the future. We appreciate CVS' cooperation in resolving these matters."

According to the Assurance of Discontinuance, CVS allegedly overcharged Massachusetts towns, cities, and other political subdivisions on prescription prices for drugs by $1.3 Million since 2002. Under the terms of the settlement, CVS will re-pay these overcharges, and will also pay an additional $1.35 Million to the Commonwealth's general fund. The settlement is part of an ongoing investigation by the Attorney General's Insurance and Financial Services Division of prescription overcharges by pharmacies to public entities under the workers compensation insurance system. The Attorney General filed similar settlements with Shaws Supermarkets earlier this year and with Stop & Shop in 2009 to resolve similar overcharge issues.

This matter was handled by Assistant Attorneys General Peter Leight and Glenn Kaplan, and by mathematician Burt Feinberg and economist Bryan Lincoln of Attorney General Coakley's Insurance and Financial Services Division.

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