The pharmacy chain CVS will pay $37.8 million under a settlement in a federal lawsuit. Prosecutors say CVS dispensed and billed U.S. government health plans, including military provider Tricare, for more insulin than was prescribed for its diabetic customers. (File)

Pharmacy chain CVS will pay $37.8 million for dispensing and billing health care plans including the military’s Tricare for more insulin than was prescribed for the pharmacy’s diabetic customers, according to a federal lawsuit settlement.

For 10 years starting in 2010, CVS pharmacists ordered refills of insulin pen prescriptions before patients finished previous supplies, the Justice Department said in a statement this week.

The pens are used to give insulin shots to people with type 1 and type 2 diabetes. Across all insulin types, the price of a 30-day supply of insulin increased from $271 in 2012 to $499 in 2021, a 184% increase, according to the Health Care Cost Institute.

But information from prescription drug discount service GoodRx states that insulin prices have since dropped significantly.

Federal prosecutors in the CVS case alleged that by dispensing refills too soon, the pharmacy was able to overbill Tricare, Medicare, Medicaid and the Federal Employees Health Benefits Program, according to court documents.

U.S. military personnel and their family members, including children who are either under 21 or full-time students under 23, are covered by Tricare.

Customers at times also received refills from CVS before their insurance plan would have approved reimbursement, prosecutors said.

Woonsocket, R.I.-based CVS said in a statement that insulin pen billing “has long been a challenge for pharmacies” because of labeling changes, variable dosing and packaging, and varying payor supply limits, Reuters reported Tuesday.

As part of the settlement, CVS will pay $24.4 million to the federal government, with the remainder distributed to 30 U.S. states, the District of Columbia, Puerto Rico and the Virgin Islands.