CVS Caremark Ordered to Pay $290 Million in Drug Fraud Suit (2)

CVS Caremark Corp. must pay nearly $290 million after a federal judge tripled damages and assessed False Claims Act penalties against the pharmacy benefit manager for making drug price misrepresentations to Medicare.

Treble damages and a per-claim penalty aren’t excessive under the US Constitution, said Judge Mitchell S. Goldberg of the US District Court for the Eastern District of Pennsylvania in a Tuesday order. The penalty also doesn’t violate due process in light of the company’s fraud and concealment, Goldberg said.

The ratio of tripling and statutory penalty damages to actual damages is about 2-to-1. The court said that’s ...