CVS Pays $12M Settlement Over MassHealth Drug Overcharges

CVS Pharmacy has agreed to pay $12.25 million to Massachusetts' Medicaid program, MassHealth, to settle allegations that it overcharged the program for prescription drugs by not applying lower prices offered to cash-paying customers through a discount program administered by ScriptSave. Massachusetts requires pharmacies to charge MassHealth the lowest price they offer any other customer, a regulation known as the 'most favored nation' pricing policy. The settlement also mandates CVS to implement an annual reconciliation process to ensure MassHealth is not overcharged in the future. The lawsuit, filed in April 2025, was brought jointly by the attorneys general of Massachusetts, Connecticut, Indiana, and Oklahoma, following a whistleblower complaint filed in federal court. CVS stated that the settlement is not an admission of liability but was agreed upon to avoid further litigation expenses. Massachusetts Attorney General Andrea Joy Campbell emphasized that overcharging Medicaid undermines public programs and burdens taxpayers, and the settlement aims to protect the integrity of these programs.