Massachusetts Attorney General Andrea Joy Campbell has initiated legal action against CVS Health Corporation and CVS Pharmacy, Inc. The complaint alleges that CVS charged MassHealth, the state's Medicaid program, higher prices for prescription drugs than those offered to cash-paying customers through a discount program managed by ScriptSave.
AG Campbell claims that CVS failed to report and bill MassHealth at these lower discounted rates, which contravenes Massachusetts pricing regulations. These regulations mandate that pharmacies must charge MassHealth the lowest price they offer any other customer.
"When pharmacies offer discounted drug pricing to its customers, they must also charge MassHealth that same low price," stated AG Campbell. "At a time when costs are sky-high, our taxpayers should not have to foot the bill for pharmacies’ inaccurate price reporting."
The complaint highlights that despite the "Most Favored Nation" drug pricing regulation in place since 1995, CVS's methodology for submitting drug prices did not ensure MassHealth received the best prices available, particularly for generic drugs. It further alleges that ScriptSave administered discount card programs for former customers of CVS’s Health Savings Pass and at former Target pharmacies acquired by CVS, resulting in lower prices than those billed to MassHealth.
This lawsuit is filed jointly with attorneys general from Connecticut, Indiana, and Oklahoma following a whistleblower complaint in the United States District Court for the District of Columbia.
The case is being managed by Deputy Chief Kevin Lownds, Managing Attorney Ian Marinoff, Investigations Supervisor Christopher Cecchini, and Senior Healthcare Fraud Investigator William Welsh from the AG’s Medicaid Fraud Division. Substantial assistance was provided by MassHealth during the investigation.
The AGO’s Medicaid Fraud Division is certified annually by the U.S. Department of Health and Human Services to investigate healthcare providers defrauding MassHealth. It also investigates complaints of abuse or neglect of Medicaid patients or residents in long-term care facilities.
Funding for Massachusetts' Medicaid Fraud Division comes primarily from a federal grant totaling $5,922,320 for fiscal year 2025 from the U.S. Department of Health and Human Services. The Commonwealth of Massachusetts contributes an additional $1,974,102.