Omnicare, the long-term care pharmacy unit CVS Health has owned since 2015, has completed its Chapter 11 bankruptcy liquidation after a Texas judge approved its wind-down plan. The plan follows a $250 million sale of Omnicare's operations and a $440 million settlement with the Justice Department over a fraudulent billing case that had produced a $949 million judgment against the unit.
A bankruptcy judge in Texas has approved Omnicare's wind-down plan after the CVS Health subsidiary sold its business operations for $250 million and reached a $440 million deal with the Justice Department to resolve an improper billing case. Omnicare, which serves nursing homes, assisted living centers, and long-term care and rehab facilities, filed for Chapter 11 bankruptcy in September 2025. CVS Health has owned the unit since 2015.
Settling a $949 million fraud judgment
The bankruptcy followed a $949 million judgment against Omnicare for fraudulently dispensing drugs without valid prescriptions to elderly and disabled patients and billing federal health care programs for false claims. U.S. District Judge Colleen McMahon in Manhattan imposed a $542 million penalty for filing 3,342,032 false claims between 2010 and 2018, and awarded $406.8 million in damages, three times the $135.6 million a jury had awarded on April 29. The government later resolved the judgment through a $440 million settlement that requires CVS to pay $130 million upfront and cover the remaining $310 million if Omnicare fails to do so by March 2028.
According to Jay Clayton, U.S. Attorney for the Southern District of New York: "False claims in the healthcare industry cost every American." He also said the jury found CVS Health Corporation, Omnicare's parent, liable for causing Omnicare to submit false claims.
CVS Health released from liability
The approved settlement protects CVS Health from future liability tied to the case, and Omnicare agreed to release potential legal claims against its parent company. Omnicare's purchaser, GenieRx Holdings, is a joint partnership between Milrose Capital LLC and Integro Asset Management LLC. The sale is expected to close next month, Omnicare attorney Martha Wyrick of Haynes and Boone LLP said.
CVS Health raises its outlook
CVS Health CEO David Joyner said the company generated $5.2 billion in adjusted operating income and $2.58 in adjusted earnings per share in the second quarter of 2026, and is raising its full-year adjusted earnings-per-share guidance by $0.60 to a range of $7.90 to $8.10. The company also raised its cash flow from operations outlook to at least $11.5 billion, a $2 billion increase from its prior guidance.
Source: TheStreet
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