CVS Caremark Issues Statement on Settlement Concerning Retail Pharmacy Reimbursements for Certain Medicaid Patients

CVS Caremark CVS announced today that it has reached a settlement agreement with the U.S. Department of Justice, the Office of Inspector General of the Department of Health and Human Services, and a number of state Attorneys General to resolve a civil complaint concerning how its CVS/pharmacy retail pharmacies submitted reimbursement claims in certain states for prescriptions filled for "dual eligible" patients who have coverage under both Medicaid and a third party insurance plan. Pursuant to the agreement, the Company has expressly denied engaging in any wrongful conduct and has settled the matter to avoid the expense and uncertainty of protracted litigation. The settlement calls for payment by the Company of an aggregate amount of $17.5 million to be allocated among the federal government and ten participating states, which include Alabama, California, Florida, Indiana, Massachusetts, Michigan, Minnesota, New Hampshire, Nevada and Rhode Island. This payment amount has been fully accrued for in prior fiscal periods and is not material.