Health Law Daily Wrap Up, CONTROLLED SUBSTANCES—SETTLEMENT AGREEMENTS: CVS to pay $315M to settle FCA, CSA allegations, (Oct 16, 2026)

By Sherri M. Schroeder, J.D.

The government alleged that the pharmacy chain illegally filled prescriptions for opioids and other controlled substances and then billed Medicare and other federal health care programs.

U.S. pharmacy giant CVS Pharmacy, Inc. and its related corporate entities have agreed to pay a total of $315 million to resolve allegations that for more than 12 years it illegally filled prescriptions for opioids and other controlled substances in violation of the Controlled Substances Act (CSA) and then billed Medicare and other federal health care programs for many of those invalid prescriptions in violation of the False Claims Act (FCA). Although CVS denied those allegations, it agreed to pay $189 million to settle the FCA claims and $126 million to settle the CSA allegations. In addition to agreeing to pay the monetary penalties, the pharmacy chain signed a memorandum of agreement (MOA) with the Drug Enforcement Agency (DEA) addressing its future obligations in dispensing controlled substances (FCA Settlement Agreement; CSA Settlement Agreement, U.S. ex rel. Estright v. CVS Health Corp., No. 22-cv-00222 (D.R.I.) (Oct. 9, 2026)).

Allegations. In October of 2019, a former employee filed suit pursuant to the qui tam provisions of the FCA; in December of 2024, the U.S. intervened, alleging claims under the CSA and FCA. The U.S. alleged that from October 17, 2013, through December 2, 2025, CVS dispensed controlled substance prescriptions that were not valid, were not for a medically accepted indication, were not medically necessary, were not issued for legitimate medical purpose or in the usual course of professional practice, presented red flags that were not resolved or documented, or were in violation of the restrictions on refills. Specifically, according to the Department of Justice (DOJ) press release, CVS dispensed prescriptions for dangerous and excessive quantities of opioids; filled opioid prescriptions too early; dispensed dangerous combinations of opioids, benzodiazepine, and muscle relaxants; and filled prescriptions from “pill mill” prescribers issuing large numbers of controlled substance prescriptions without any medical purpose. The U.S. alleged that by knowingly filling these prescriptions, CVS violated the CSA.

The U.S. further alleged that by knowingly filling such prescriptions, by administering or adjudicating claims for such prescriptions, and by submitting claims for reimbursement to federal health care programs for such prescriptions, CVS caused false claims to be submitted to federal health care programs that were not eligible for reimbursement in violation of the FCA.

Per the DOJ press release, the complaint further alleged “that CVS’s violations stemmed from corporate-imposed performance metrics, incentive compensation, and staffing policies that prioritized corporate profits over patient safety.” The complaint also alleged CVS failed to employ enough pharmacists to serve patients, comply with CVS’s legal obligations, and meet these corporate metrics. Additionally, CVS’s policies allegedly prevented pharmacists from warning each other about problematic prescribers.

It should be noted that the settlement agreements are neither an admission of liability by CVS nor concession by the U.S. that its claims were not well-founded. CVS denies the allegations. There has been no determination of liability.

Settlement. CVS agreed to pay $126,000,000 and signed an MOA to settle the CSA allegations against it. To settle the FCA allegations, the pharmacy chain agreed to pay $189,000,000, plus interest, of which $94,500,000 is restitution. The relator filing the suit—a former employee, per the DOJ press release—will receive a share of the proceeds and her reasonable expenses, attorney fees, and costs.

MOA. Under the MOA’s terms, CVS must establish and maintain a controlled substance dispensing oversight program and policies and procedures, a controlled substances professional practice department, and a Chief Pharmacy Controlled Substances Officer. The company must also annually certify its compliance with the MOA; share certain data with the DEA; comply with all controlled substances laws and regulations; annually train employees, including training on refusing illegitimate prescriptions; notify DEA of any disciplinary action against a CVS pharmacist for violation of federal or state controlled substance laws; establish a “red flag” prescription validation process; establish a prescriber review process; conduct at least annual practice compliance reviews of its retail stores; require that each store complete a controlled substance inventory at least annually; and maintain associated records. In addition, CVS must maintain telephone and electronic submission hotlines through which employees, patients, or the public may anonymously report suspected inappropriate or illegitimate dispensing, prescribing, or diversions of designated controlled substances or violations of policies, procedures, the MOA, or other applicable law.

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