CVS Health Corp.’s pharmacy-services subsidiary, Omnicare Inc., has filed for Chapter 11 bankruptcy protection after being ordered to pay a $949 million civil judgment stemming from allegations that it improperly dispensed prescription drugs to residents in long-term care facilities.
The Texas-based filing, submitted Monday, lists Omnicare and certain affiliates with assets of at least $100 million and liabilities ranging from $1 billion to $10 billion. The $949 million judgment represents the company’s largest unsecured debt, though Omnicare continues to challenge the ruling in court.
To support its operations during the bankruptcy process, Omnicare has secured $110 million in debtor-in-possession financing. Combined with ongoing cash flow from its business, the company says this funding will ensure it has sufficient liquidity to maintain daily operations while it navigates a court-supervised restructuring.
“The Chapter 11 filing will allow Omnicare to evaluate options for resolving the judgment and addressing broader financial challenges facing the long-term care pharmacy sector,” the company said. It added that potential strategies could include a standalone restructuring of its business or a sale of the company.
The bankruptcy comes shortly after reports that Omnicare was working with Alvarez & Marsal Inc. to manage cash flow and operational issues. Filing for Chapter 11 is expected to pause government efforts to collect on the judgment while the company reorganizes.
The judgment itself stems from a whistleblower lawsuit filed in 2015 by a former Omnicare pharmacist in New Mexico, which the federal government later joined in 2019. A jury trial found Omnicare liable, and a federal judge denied the company and CVS’s request to overturn the ruling in August.
Despite the bankruptcy filing, Omnicare emphasized that it is committed to continuing service for customers and long-term care residents. “Patients and customers can expect uninterrupted access to pharmacy and clinical services,” the company said, noting its focus remains on safe and reliable care for long-term care facilities.
The case is listed as Omnicare LLC, case number 25-80486, in the U.S. Bankruptcy Court for the Northern District of Texas.
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