Oklahoma’s CVS Medicaid lawsuit activity spans several distinct actions: a $32.1 million settlement in September 2025 over withheld drug rebates owed to the state employee health plan, a $5 million settlement in December 2025 over pharmacies reimbursed below cost, Oklahoma’s role in a multi-state whistleblower case alleging CVS overbilled Medicaid by hiding its lowest cash prices, and a share of a $36.5 million multi-state settlement in June 2026 over insulin billing. Attorney General Gentner Drummond has led most of this work, while a 2023 federal appeals ruling has limited how far Oklahoma’s pharmacy benefit manager laws can reach into employer-sponsored plans.
The $32.1 Million HealthChoice Rebate Settlement
On September 9, 2025, Drummond announced a $32.1 million settlement with CVS Caremark over allegations that the company failed to pass drug manufacturer discounts and rebates through to HealthChoice, the health plan covering state employees, retirees, and their families.1Oklahoma.gov. Drummond Secures $32M in Settlement With CVS Caremark The state said CVS Caremark was contractually required to pass those rebates on but instead kept them from January 2020 through December 2024.2Oklahoma Voice. CVS Caremark Agrees to $32M Settlement Involving Oklahoma Employee Health Plan, AG Says
After outside counsel fees, roughly $27 million was directed to HealthChoice. The settlement also rewrote the contract going forward. CVS Caremark must pay any additional rebate amounts identified for the 2020–2024 period within 90 days, pass through all future rebates to the state within 90 days of collection, and report collected rebates quarterly under an expanded definition of “rebate.”1Oklahoma.gov. Drummond Secures $32M in Settlement With CVS Caremark The funds were intended to help keep premiums lower for plan members. CVS Caremark denied wrongdoing and said it settled to avoid the costs and uncertainties of litigation.3News From the States. CVS Caremark Agrees to $32M Settlement Involving Oklahoma Employee Health Plan, AG Says
The $5 Million Below-Cost Pharmacy Reimbursement Settlement
In January 2025, Drummond filed a complaint in Oklahoma’s PBM Administrative Court alleging CVS Caremark had repeatedly reimbursed Oklahoma pharmacies less than what they paid for the drugs they dispensed.4News From the States. Oklahoma Attorney General Files Lawsuit Against CVS Caremark for Below-Cost Reimbursement The initial complaint cited roughly 200 instances from May through October 2024, drawn from 15 pharmacies, and said CVS Caremark had failed to follow the appeals procedures required by state law.5NCPA. Oklahoma AG Turns Screws on CVS for Below-Cost Reimbursement
By December 2025, the case had grown. The final settlement of $5,081,520.69 covered 68,099 prescriptions filled between January 2024 and August 2025.6Oklahoma.gov. Drummond Holds CVS Caremark Accountable With $5M Settlement Seventy-five percent of the fines and costs was earmarked to go directly to affected pharmacies, with the remaining 25 percent funding the Attorney General’s ongoing PBM oversight work. The office said it would contact eligible pharmacies in writing with payment instructions.7GovDelivery. CVS Caremark Settlement Bulletin If you run a pharmacy that filled claims through Caremark during that window, that letter is how you’ll be told what you’re owed.
CVS Caremark also agreed to several operational changes: reviewing pharmacy payment disputes against national cost benchmarks, letting pharmacies submit documentation of actual acquisition costs during challenges, responding to disputes within the ten calendar days required by Oklahoma law, and working with the Attorney General’s office for 90 days to resolve additional outstanding complaints.8Healthcare Finance News. CVS Caremark Settles PBM Allegation for $5 Million CVS Caremark again denied wrongdoing.9Journal Record. Oklahoma CVS Caremark PBM Settlement
The Multi-State Medicaid Whistleblower Case
The lawsuit most directly aimed at Medicaid is a federal whistleblower case Oklahoma joined in May 2025. Attorneys general from Connecticut, Massachusetts, Indiana, and Oklahoma intervened in United States et al. ex rel. Doe v. CVS Health Corporation et al. (No. 1:16-cv-02359), originally filed in 2016 in the U.S. District Court for the District of Columbia. The complaint alleges CVS pharmacies systematically overbilled state Medicaid programs by failing to report the lowest prices they offered to the general public.10Connecticut Attorney General. Attorney General Tong Joins Whistleblower Suit Against CVS Pharmacy
The case focuses on a discount card program run by a company called ScriptSave. According to the complaint, CVS used ScriptSave to offer cash-paying customers prices below what CVS reported to Medicaid as its “usual and customary” price. Federal and state rules generally require pharmacies to bill Medicaid the lowest price they accept from any customer, including those using discount programs. The states allege CVS failed to do that from at least 2016 onward, causing Medicaid programs to overpay.11Healthcare Finance News. CVS Health Overcharged Medicaid Programs, States Complain in Lawsuit
The original whistleblower was a former Target pharmacist whose employer was acquired by CVS in 2015. The complaint says Target pharmacies had previously reported their cash discount prices to states as their usual and customary prices, and that the practice stopped after CVS took over. For more than 20 drugs, the whistleblower alleged, the reported usual and customary price was inflated by over 100 percent, with two drugs showing exaggerations exceeding 700 percent.12Whistleblower Law Collaborative. 30 States Suit Against CVS Over Medicaid Programs A coalition that eventually grew to nearly 30 states joined.
CVS has disputed the claims, arguing that none of the four lead states ever issued guidance saying third-party discount card prices count as a pharmacy’s usual and customary prices. The company pointed to past lawsuits raising similar claims, saying it has “prevailed many times, including by dismissal of the plaintiff’s allegations by the court and by verdicts from juries or final awards by arbitrators.”11Healthcare Finance News. CVS Health Overcharged Medicaid Programs, States Complain in Lawsuit
The $36.5 Million Insulin Settlement
In June 2026, Oklahoma shared in a separate multi-state Medicaid settlement with CVS. A coalition of 36 attorneys general, led by New York’s Letitia James, and the U.S. Department of Justice reached a $36.5 million agreement over allegations that CVS knowingly dispensed more insulin than prescribed, refilled prescriptions prematurely, and falsified data about supply duration and refill compliance from 2010 through 2020.13New York Attorney General. Attorney General James Secures $36.5 Million From CVS for Defrauding Medicaid Of that total, $25.1 million was allocated to participating state Medicaid programs, and the settlement included a permanent injunction.14State AG Report. AG James Multistate Coalition Secures $36.5 Million From CVS in Medicaid Fraud Settlement
The Earlier $4.8 Million Oklahoma Insurance Department Settlement
These actions follow an earlier state settlement. In January 2022, the Oklahoma Insurance Department announced a $4.8 million settlement with CVS Caremark over alleged violations of the Patient’s Right to Pharmacy Choice Act. The investigation, which began in September 2020, found CVS Caremark had improperly collected transaction fees from pharmacies on Medicare Part D and ERISA plan claims. The agreement set aside $2.3 million for Oklahoma pharmacies and $2.5 million in penalties.15Oklahoma Insurance Department. OID Settlement With CVS Caremark Distribution was made contingent on the outcome of Pharmaceutical Care Management Association v. Mulready, which was then pending.16NCPA. CVS Caremark Will Pay $4.8 Million to Oklahoma Over ERISA, Part D Fees
What Oklahoma Can and Cannot Enforce After Mulready
A separate but related fight shapes what the state can actually enforce. The Pharmaceutical Care Management Association, a PBM trade group, sued to invalidate Oklahoma’s 2019 Patient’s Right to Pharmacy Choice Act, arguing it was preempted by the federal Employee Retirement Income Security Act and Medicare Part D. A federal district court sided with Oklahoma. The Tenth Circuit Court of Appeals reversed on August 15, 2023, ruling that ERISA preempted key provisions including minimum network access standards, restrictions on using discounts to steer patients to PBM-affiliated pharmacies, the “any willing provider” requirement, and the prohibition on terminating pharmacies solely for probation status.17Aimed Alliance. State-Based PBM Reform
On June 30, 2025, the U.S. Supreme Court declined to hear Oklahoma’s appeal, leaving the Tenth Circuit ruling in place.18SCOTUSblog. Mulready v. Pharmaceutical Care Management Association Drummond’s office expressed disappointment and said it remained hopeful for future legal clarity that would let states regulate PBMs as originally intended.19Journal Record. Supreme Court Declines Review Practically, Oklahoma cannot enforce those specific provisions against ERISA-governed employer plans. The state’s PBM rules still apply to state-regulated insurance markets, which is why actions involving HealthChoice, Medicaid billing, and state pharmacy law have continued.
Legislative Response
Oklahoma has kept passing PBM laws. House Bill 3376, enacted in 2024, banned spread pricing (where a PBM pockets the difference between what it charges a plan and what it pays a pharmacy), required PBMs to disclose detailed transaction records, and strengthened the Attorney General’s enforcement authority.20CSG South. How States Are Reforming Pharmacy Benefit Manager Regulations In 2025, House Bill 2048 established the Oklahoma 340B Nondiscrimination Act, barring discriminatory reimbursement against pharmacies in the federal 340B program.
In February 2026, a Senate committee advanced four more PBM bills. SB 2074 would have set a reimbursement floor requiring PBMs to pay pharmacies no less than the national drug acquisition cost plus a dispensing fee tied to the Medicaid rate. SB 1447 would have barred the state employee insurance plan from contracting with any PBM that had paid settlements, fines, or judgments exceeding $4 million in the previous five years, a threshold CVS Caremark would have crossed.21Oklahoma Senate. Oklahoma Senate Committee Advances Reforms Targeting Pharmacy Benefit Managers SB 2074 passed both chambers and was vetoed by the governor on April 22, 2026.22Oklahoma Legislature. SB 2074 Bill Information