Press Release - Wednesday, May 14, 2025
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Illinois Recovers $45 Million Settlement from CVS Caremark
Funds lower liability to taxpayers for general revenue fund as PBM accountability and reform is pending in the General Assembly
CHICAGO - The Illinois Office of the Attorney General (OAG) reached a settlement on behalf of the Illinois Department of Central Management Services (CMS) and taxpayers of Illinois to recover $45 million from CVS Caremark in pharmacy benefit rebates. The settlement negotiation, led by OAG in conjunction with the Illinois Governor's Office and CMS attorneys, resolves allegations that the pharmacy benefit manager (PBM) failed to properly disclose and remit pharmaceutical rebates owed to the State under a longstanding contract.
"PBMs have gone from being useful administrative service providers to behemoths that control the pharmaceutical industry at the expense of patients and independent pharmacies," said Attorney General Kwame Raoul. "This settlement is part of my office's ongoing work to hold PBMs accountable to the people of Illinois, which also includes calling on Congress to take federal action to reign in PBMs. I will continue to advocate for reforms that ensure transparency and competition in prescription pricing."
"PBMs are driving up healthcare costs in Illinois by extracting extra profit from patients through opaque and often predatory tactics," said Governor JB Pritzker. "This agreement lowers taxpayer liability and reinforces the obligation of vendors to operate with transparency and accountability. The State of Illinois is committed to fighting for our people and will continue to pursue policies that lower healthcare costs for Illinoisans."
The funds reduce the amount requested from taxpayers for payment from the Group Insurance for State employees, retirees, and their dependents. The agreement settled claims related to rebates collected between April 1, 2020, and June 30, 2024, during CVS Caremark's administration of pharmacy benefits for state employees, retirees, and their dependents under a contract with CMS.
"CMS is tasked with managing employee benefits for nearly 500,000 covered lives and that dynamic responsibility requires diligent oversight consistent with best practices," said Raven A. DeVaughn, Director of CMS. "We are committed to ensuring our benefits administration practice not only delivers for our employees, retirees, and their dependents but for every tax-paying Illinoisan."
The OAG conducted an investigation into payments received by Zinc Health Services, LLC (ZHS)—an affiliate of Caremark—and determined that those payments constituted rebates that should have been returned to the State. According to the investigation, CVS Caremark and related entities—CVS Pharmacy, Inc., ZHS, and Zinc Health Ventures, LLC—failed to adequately disclose the nature of their relationships and the associated payments, thereby depriving Illinois of compensation owed under the contract. The agreement includes no admission of wrongdoing by Caremark or its affiliates. The case was handled by the Public Interest Division of the Illinois Attorney General's Office.
PBM Accountability and Reform
During the 2025 State of the State budget address, Governor Pritzker focused on one of his top legislative priorities this year: lowering prescription drug costs. After introducing the Prescription Drug Affordability Act (PDAA) in his address, the Governor hosted a roundtable in Springfield with legislators and independent pharmacists to discuss the impact PBMs have on their businesses. The Governor also visited Chicago Pride Pharmacy to highlight the struggles faced by independent pharmacies and the importance of reform.
The legislation championed by the Governor focuses on transparency in PBM interactions, a key element in protecting consumers and plan sponsors. By increasing transparency, particularly for vertically integrated PBMs like CVS Caremark, and requiring 100% pass-through of rebates, annual reporting, and targeted market conduct exams to disclose rebates, fees, discounts and other price concessions, the passage of the PDAA should result in savings for consumers instead of more profits for PBMs.
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