MANHATTAN (CN) - CVS Pharmacy sought coverage from insurance plans for invalid prescriptions of controlled substances that would inevitably land on the black market, an insurance company claims in Federal Court.
Fox Rx, the United States, Chicago, New York City, Washington, D.C., and 18 states claim CVS violated the False Claim Act by submitting claims to Medicare for controlled substances such as codeine and oxycodone.
Such prescriptions require a registration number issued by the Drug Enforcement Agency, but between January 2008 and 2010, Fox claims, one out of every five of the claims submitted by CVS for the drugs lacked such a number.
"CVS Pharmacy's failure to include DEA numbers was not mere error - it was a profitable business practice," Fox claims in the lawsuit, which was filed under seal in September 2013 and unsealed in late March.
"As a result of its practices, CVS allowed federal and state funds to fund the purchase of dangerous drugs for black market sale and abuse," according to the 36-page complaint.
Fox wants CVS to pay treble damages for what the federal government lost, which it estimates to be hundreds of millions of dollars, plus up to $11,000 for each prescription that was issued without a DEA number.
It's the latest in a series of legal woes for the pharmacy giant in the past year.
In April 2013, CVS agreed to pay $11 million to the federal government to settle a lawsuit accusing it of failing to keep proper records of the controlled substances it distributes.
In December 2013, it agreed to pay $4.25 million to settle accusations that it failed to reimburse Medicaid for prescription drugs.
Joining in the unsealed lawsuit are California, Florida, Georgia, Hawaii, Illinois, Indiana, Louisiana, Massachusetts, Michigan, Montana, Nevada, New Jersey, New York, North Carolina, Tennessee, Texas, Virginia and Wisconsin.
The lawsuit was filed by Robert Sadowski with Sadowski Fischer.