$285 Million FCA Trebled Damages Award Against Caremark Sparks Appeal

A few months ago, we reported on a False Claims Act (FCA) bench trial decision from the Eastern District of Pennsylvania (EDPA), in which a federal judge found that CVS Caremark Corporation (Caremark) had overbilled Medicare Part D claims in violation of the FCA to the tune of $95 million in single damages. EDPA Chief Judge Mitchell S. Goldberg had deferred ruling at the time on trebling, the number of false claims, and civil penalties — but has now made those determinations.

On August 19, 2025, Judge Goldberg trebled damages to $285,000,000, awarded civil penalties of $4,873,500 — or $9,500 per false claim — and entered final judgment against Caremark in the total amount of $289,873,500.

The discussion in the opinion on trebling is straightforward: Judge Goldberg tripled the single damages number. On the number of false claims and amount of civil penalties, Judge Goldberg assessed the parties’ arguments as to whether the number of false claims should be measured by looking to Caremark’s submission to its Part D sponsors or by looking at the Part D sponsors’ submissions to CMS. The relator had argued for a finding of 513 false claims: the number of false Direct and Indirect Remuneration (DIR) reports Aetna and SilverScript submitted to CMS as a result of Caremark’s fraud. Caremark argued that the number of false claims is four, as the “specific conduct” at issue was the preparation and submission by Caremark of four draft DIR reports to Aetna and SilverScript. Judge Goldberg sided with the relator, relying on the U.S. Supreme Court decision United States v. Bornstein, 423 U.S. 303 (1976), as well as expert submissions by both parties. Judge Goldberg found that Caremark knowingly caused the submission of the 513 DIR reports and thus could not rely on the smaller number of DIR reports it actually submitted to Aetna and SilverScript as the false claims number.

With respect to his decision on statutory penalties, Judge Goldberg noted his discretion to order an award within the statutory range of $5,500 to $11,000 per false claim. In making the determination that $9,500, an amount “near — but not at — the top of the statutory range” was appropriate, Judge Goldberg observed that “Caremark’s misconduct was serious.” Later in his opinion, in finding that neither the total award nor the per-claim penalty amount was “excessive” in violation of the Eighth Amendment or Due Process Clause, Judge Goldberg observed that the evidence showed that “the fraud was financially motivated, not the result of some innocent or mistaken belief.” He added that “Caremark concealed the true nature of its pharmacy contracts.” According to Judge Goldberg, “Caremark’s fraud harms the United States in another way: its actions cause ‘a diminution of the public’s confidence in the government.’ . . . Caremark’s conduct broke CMS’s trust, and as a result, the public’s trust in CMS.”

On September 15, 2025, Caremark filed a notice of appeal, seeking relief from the Third Circuit as to Judge Goldberg’s August judgment. Briefing has not yet begun in the appeal. We at Qui Notes will monitor developments in the appeal and update our readers.

© Arnold & Porter Kaye Scholer LLP 2025 All Rights Reserved. This Blog post is intended to be a general summary of the law and does not constitute legal advice. You should consult with counsel to determine applicable legal requirements in a specific fact situation.