New Jersey has collected two Medicaid fraud settlements from CVS, eighteen years apart. Ranitidine dosage switching marked the first. Insulin over-dispensing marked the second. Both landed in the mid-$30 million range. Both left New Jersey with a sliver—$350,879 in 2008 and $365,725 in 2026.
In March 2008, then-Attorney General Anne Milgram announced that New Jersey joined a $36.7 million national settlement with CVS Caremark Corporation, the parent entity. The company switched ranitidine dosage forms without clinical justification, then billed Medicaid for the higher-priced versions. New Jersey took $350,879. CVS admitted no liability in an agreement that required the company to sign a five-year Corporate Integrity Agreement with the Department of Health and Human Services’ Inspector General.
A separate fraud began in January 2010.
From 2010 through 2020, CVS pharmacies dispensed more insulin than prescriptions allowed, then billed Medicaid for the excess. CVS hid the premature refills by under-reporting "days-of-supply," the number of days a prescription is supposed to last.
Pharmacy benefit managers, the middlemen who process claims, ran periodic audits. They repeatedly found invalid days-of-supply data and premature refills. CVS’s auto-refill system calculated refill dates from the days-of-supply numbers that pharmacy staff entered. When staff entered numbers lower than the actual dispensed supply, the system triggered early refills. Federal prosecutors allege that CVS knew this and ignored it for years.
Those mechanics led to a federal lawsuit. On December 2, 2025 U.S. Attorney for the Southern District of New York Jay Clayton announced that CVS Pharmacy, Inc., the retail subsidiary, had agreed to pay 37.76 million. Court records list the case as 18 Civ. 3047 in the Southern District of New York. Judge John G. Koeltl presided. It covers Medicare, Medicaid, TRICARE and the Federal Employees Health Benefits Program.
CVS admitted responsibility for the conduct the government alleged in its complaint. The company stipulates that government programs "paid CVS substantial amounts for insulin pen refills that were ineligible for reimbursement and CVS pharmacies dispensed more insulin to beneficiaries than they needed."
Federal authorities joined five private whistleblower suits that remained under seal. Adam Rahimi filed the first known action in the Southern District on April 6, 2018, according to the New York Attorney General settlement agreement. The Department of Justice does not disclose individual relator allocation.
The relators will collectively receive 19.5 percent of the recovery, according to Murphy Anderson PLLC. That award totals roughly $7.4 million based on the settlement math, though the firm cited approximately $7.1 million. The government investigated for roughly seven years before announcing the settlement.
That deal triggered a multi-state payout. New Jersey joined on June 15, 2026. "Medicaid is intended to provide essential healthcare services to individuals and families who need it most," said New Jersey Attorney General JenniferDavenport. "We will not tolerate corporations who seek to exploit this important resources to benefit their bottom line." California Attorney General Rob Bonta framed the deal as holding CVS "accountable for its fraudulent drug dispensing and billing practices." New York Attorney General Letitia James warned: "When big companies defraud Medicaid, hardworking New Yorkers pay the price." The announcement came from Attorney General Jennifer Davenport
Those settlements raise questions about penalty scales and regulatory follow-through. Federal prosecutors announced the settlement as 37.76 million in December 2025, with 24.4 million allocated to the federal government. State attorneys general announced 36.5 million in June 2026. NJBallot could not determine whether the difference reflects a revised calculation, separate state allocations, or accounting adjustments. New Jersey's share reflects its portion of the affected Medicaid population; the state is not among the largest Medicaid programs nationally. The deal requires no new Corporate Integrity Agreement and names no individual executives. Totals look similar, but BLS data shows 36.7 million in 2008 equals roughly 54.9 million today. CVS's revenues grew from 87.47 billion to 372.81 billion in the same period. In 2008, the deal covered 23 states and the District of Columbia. In 2025, the federal settlement stipulation lists 30 states plus territories, though state attorneys general announced a coalition of 37 attorneys general, according to the New York Attorney General. That gap raises questions about whether penalty scales have kept pace with corporate growth or geographic expansion.
CVS signed the five-year agreement in March 2008. It required compliance officers, training, annual reports and the threat of exclusion from federal programs if CVS breached the terms. Insulin fraud began in January 2010, while the agreement was still active, and continued for more than seven years after it expired in 2013. No executive is named in either settlement.
New Jersey's Office of the Insurance Fraud Prosecutor handled the 2026 settlement. Acting Prosecutor Bernard J. Cooney leads the office. Medicaid Fraud Control Unit, under Director Heather M. Hadley, assisted. MFCU funding for fiscal year 2026 totals 11.6 million, with HHS covering 75 percent through a federal grant and New Jersey the remainder. Duane Morris, a pharmacy litigation firm, noted that approximately 6,300 CVS pharmacies showed negative audits and over 14,000 violations. "It is hard for CVS pharmacies to argue this was not an intentional practice," the firm stated. That pattern spanned a decade.
This insulin case followed a separate 18.28 million California case in November 2025. CVS paid that amount to resolve allegations that it submitted false electronic certifications for certain drugs to California's Medi-Cal program between 2010 and 2021.
The California settlement resolved claims brought by a different whistleblower, a former CVS pharmacist, according to the Department of Justice.
CVS spokesperson Amy Thibault pushed back. "While we do everything we can to ensure patients can access the medications they need, insulin pen billing has long been a challenge for pharmacies," she said. "Factors such as FDA labeling changes, no single pen packaging options, insulin dosing variability, and varying payor supply limits and instructions have made billing for these medications incredibly complex. With this settlement, we're pleased to put this issue behind us and avoid the cost and expense of litigation."
No new Corporate Integrity Agreement emerged from the 2026 settlement. HHS-OIG lists CVS Pharmacy, Inc. under "Heightened Scrutiny" with a "Refused" status. That designation took effect October 31, 2025, and runs 10 years. Under heightened scrutiny, OIG may conduct claims reviews, audits and unilateral monitoring that other providers do not face. Susan Gillin, HHS-OIG Acting Chief Counsel, noted in the November 2025 California case that "CVS did not agree to compliance-related oversight with HHS-OIG through a corporate integrity agreement." That posture carries more bite than the 2008 agreement. State MFCUs investigated through the National Association of Medicaid Fraud Control Units.
NJBallot could not determine whether patients experienced adverse effects from the excess insulin or the switched ranitidine formulations.
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Sources:
• Bureau of Labor Statistics, U.S. Department of Labor, Consumer Price Index — All Urban Consumers (CPI-U), Annual Averages, 2008 and 2025 (accessed June 16, 2026)
• California Office of the Attorney General, "Attorney General Bonta: CVS to Pay 36.5 Million to Settle Allegations of Overbilling Medi-Cal" (June 10, 2026)
• CVS Health Corporation, Form 10-K Annual Report, U.S. Securities and Exchange Commission (2024)
• Duane Morris LLP, "Major Pharmacy Benefit Manager Agrees to Second Settlement for Alleged False Claims Act Violations Over Insulin Refills" (December 5, 2025)
• Ledda, Brianne, "CVS to pay out millions to NYS, federal government for alleged Medicaid fraud," Newsday (June 9, 2026)
• Murphy Anderson PLLC, "Whistleblower Attorneys Secure 37.76 Million CVS Settlement for Insulin Overbilling Fraud" (December 3, 2025)
• New Jersey Office of the Attorney General, "Attorney General Anne Milgram announced today that New Jersey received 350,879 in a national civil Medicaid fraud settlement negotiated with CVS/Caremark Corporation" (March 27, 2008)
• New Jersey Office of the Attorney General, "Attorney General Davenport Announces New Jersey Has Joined 36.5 Million Settlement With CVS Pharmacy" (June 15, 2026)
• New York Office of the Attorney General, In the Matter of CVS Pharmacy, Inc., Settlement Agreement (June 9, 2026)
• New York Office of the Attorney General, "Attorney General James Secures 36.5 Million from CVS for Defrauding Medicaid" (June 9, 2026)
• U.S. Department of Health and Human Services Office of Inspector General, Corporate Integrity Agreements — Heightened Scrutiny Registry, entry for CVS Pharmacy, Inc., effective October 31, 2025, duration 10 years (accessed June 16, 2026)
• U.S. Department of Justice, "Corporate Integrity Agreement Between the Office of Inspector General of the Department of Health and Human Services and CVS Caremark Corporation" (2008)
• U.S. Department of Justice, "CVS Caremark Corp. to Pay 36.7 Million to U.S., 23 States, & D.C. to Settle Medicaid Prescription Drug Fraud Allegations" (March 18, 2008)
• U.S. Department of Justice, U.S. Attorney's Office, Eastern District of California, "CVS Pharmacy Inc. Pays 18.2 Million to Resolve Alleged False Claims Act Violations" (November 17, 2025)
• U.S. Department of Justice, U.S. Attorney's Office, Southern District of New York, "U.S. Attorney Announces 37.76 Million Settlement With CVS For Over-Dispensing Insulin Pens To Patients" (December 2, 2025)
Note:
The New York Attorney General settlement agreement lists the relator as "Azam Rahimi." The VSG Law settlement stipulation and CourtListener both list "Adam Rahimi." This article uses "Adam," consistent with the majority of sources.