CVS to pay DOJ $440M to resolve $949M judgment against bankrupt Omnicare unit
CVS Health will be paying $440 million to the federal government, resolving allegations that its nursing home pharmacy unit, Omnicare, submitted more than 3.3 million fraudulent claims for prescriptions over an eight-year period, beginning in 2010.
The U.S. Department of Justice successfully sued CVS with the help of a whistleblower, resulting in a judge ordering the company to pay out nearly $949 million as part of a July 2025 final judgment that included both a payback of the amount of reimbursement it received from the prescriptions, plus damages and fines.
It was concluded by a jury in April 2025 that Omnicare had taken in more than $135 million fraudulently from 2010 to 2018 as a result of overbilling Medicare for the cost of medications. The court agreed with the DOJ that the actions by the company were deliberate.
Given the sheer volume of overbilled claims, prosecutors sought $542 million in penalties alone.
Now the full lawsuit will be resolved with a $440 million payment from CVS, as part of a settlement with the DOJ that involves CVS selling Omnicare to GenieRX Holdings, which will take over ownership.
Should that deal not close, CVS could be on the hook for the remainder of the court-ordered judgment.
Pushed into the red
The sale of Omnicare comes after the group filed for Chapter 11 bankruptcy in September 2025, in large part because of the DOJ lawsuit. That officially made the federal government one of its debtors, making a settlement possible.
"Together, the agreements establish the framework for the debtors to confirm consensual chapter 11 plans, eliminate the need for protracted and expensive litigation, resolve the treatment of DOJ’s and CVS’ claims, and provide the best chance that all other general unsecured claims will be paid in full," the most recent filing with the court reads.
It was then announced in May of this year that CVS was planning to sell Omnicare to GenieRX Holdings, making it a private company.
With the agreement between the parties signed, CVS has 14 days to make the first payment of $130 million to the DOJ. It then has until March 15, 2028 to pay the remaining $310 million, court documents show.
The lawsuit against CVS/Omnicare was brought under the False Claims Act, stemming from a legal complaint made by a pharmacist-turned-whistleblower who worked at the company back in 2015—meaning the alleged fraud continued for another three years.
Chad is an award-winning writer and editor with over 15 years of experience working in media. He has a decade-long professional background in healthcare, working as a writer and in public relations.