Press Release  AG Campbell Secures $12.25 Million Settlement With CVS For Failure To Comply With MassHealth Prescription Drug Pricing Regulations

Boston — Massachusetts Attorney General Andrea Joy Campbell today announced that her office has reached a $12.25 million settlement with CVS Pharmacy, Inc. (CVS) to resolve allegations that CVS charged MassHealth, the state’s Medicaid program, higher prices than they offered to the general public for the same drugs.  

“When pharmacies overcharge MassHealth, they’re undermining the integrity of our public programs and leaving taxpayers to foot the bill,” said AG Campbell. “I am proud to announce this settlement, which will prevent future inaccurate price reporting and ensure MassHealth has the resources it needs to continue serving Massachusetts residents.” 

As part of the settlement, CVS will pay $12.25 million to MassHealth and adopt a yearly reconciliation process in which they review prescription drug pricing for MassHealth members to ensure that MassHealth is not overcharged in the future.  

The settlement resolves allegations in an April 2025 lawsuit filed by the Attorney General’s Office (AGO) that CVS offered lower drug prices to cash-paying customers through a discount program administered by a company called ScriptSave but evaded its responsibility to report and bill MassHealth those lower, discounted rates. The AGO alleged that this conduct violated Massachusetts pricing regulations, which require pharmacies to charge MassHealth the lowest price they charge any other customer. 

In its complaint, the AGO alleged that, despite the fact that MassHealth has had a “Most Favored Nation” drug pricing regulation since 1995, which entitles it to the lowest prices CVS charges or accepts from other payors, CVS followed a methodology for submitting drug pricing that had not given MassHealth its best prices, particularly for generic drugs. The AGO alleged that CVS contracted with ScriptSave to administer discount card programs for former customers of CVS’s discount card program, Health Savings Pass, and at former Target pharmacies, which CVS acquired. Customers with those ScriptSave discount cards often received lower prices than MassHealth. 

The complaint was jointly filed by the attorneys general of Connecticut, Indiana, and Oklahoma and followed a whistleblower lawsuit filed in the United States District Court for the District of Columbia.  

This matter is representative of AG Campbell’s efforts to protect against waste, fraud, and abuse with respect to prescription drug pricing. In July, the AGO announced a $1.6 million settlement with Gilead Sciences, Inc. to resolve allegations that it improperly paid kickbacks to providers to improperly promote Gilead’s HIV drugs. In December 2024, the AGO announced separate settlements with two independent retail pharmacies, Center Pharmacy and Galaxy Pharmacies, to resolve allegations that the companies submitted false claims to MassHealth. 

This matter was handled by Division Chief Kevin Lownds, Investigations Supervisor Christopher Cecchini, and Senior Healthcare Fraud Investigator William Welsh, all of the AG’s Medicaid Fraud Division. MassHealth provided substantial assistance with the investigation. 

The AGO’s Medicaid Fraud Division is a Medicaid Fraud Control Unit, annually certified by the U.S. Department of Health and Human Services to investigate and prosecute health care providers who defraud the state’s Medicaid program, MassHealth. The Medicaid Fraud Division also has jurisdiction to investigate and prosecute complaints of abuse, neglect and financial exploitation of residents in long-term care facilities and of Medicaid patients in any health care setting. Individuals may file a MassHealth fraud complaint or report cases of abuse or neglect of Medicaid patients or long-term care residents by visiting the AGO’s website.  

The Massachusetts Medicaid Fraud Division receives 75 percent of its funding from the U.S. Department of Health and Human Services under a grant award totaling $5,922,320 for federal fiscal year 2025. The remaining 25 percent, totaling $1,974,102 for FY 2025, is funded by the Commonwealth of Massachusetts. 

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