WOONSOCKET, September 24 — CVS Omnicare, the long-term care pharmacy subsidiary of CVS Health, has won court approval to liquidate, closing out a bankruptcy that began in September 2025 and followed a $949 million fraud judgment against the business. Judge Stacey G. C.
Jernigan of the U.S. Bankruptcy Court for the Northern District of Texas approved the wind-down plan, according to Seeking Alpha, which reported that the plan drew “overwhelming acceptance” from general unsecured creditors. Yahoo Finance published a report on the approval on Saturday, September 19.
Omnicare serves nursing homes, assisted living centers, and long-term care and rehabilitation facilities. CVS Health has owned the subsidiary since 2015.
The judgment and the settlement
The bankruptcy filing followed a $949 million judgment against Omnicare for fraudulently dispensing drugs without valid prescriptions to elderly and disabled patients and billing federal government healthcare programs for millions of false claims. The government later resolved that judgment through a $440 million settlement. Under its terms, CVS pays $130 million upfront and covers the remaining $310 million if Omnicare fails to pay by March 2028, according to Bloomberg Law.
As part of the wind-down, Omnicare sold its business operations for $250 million.
A wider drugstore squeeze
The collapse of Omnicare lands in the middle of a broader crisis facing the U.S. drugstore industry. Rival Rite Aid has shut down all its stores, while CVS and Walgreens have closed thousands of locations between them. The Financial Times reported that pharmacy counter business is being squeezed by stingier drug reimbursement rates and rising pharmacist wages, while in-store sales of items from greeting cards to cosmetics face cut-price competition.
Consumers can now order much of what made the chain convenient for delivery, and online services including Amazon now fill prescriptions. Josh Cummings, a portfolio manager at Janus Henderson Investors, told the Financial Times: “The whole drugstore four-wall economic model is collapsing on itself, in my opinion.” The Omnicare bankruptcy and the $949 million fraud judgment underscore the legal and financial pressures mounting on CVS Health as it contends with a shifting retail pharmacy landscape.
Investors will note the March 2028 backstop on the remaining $310 million settlement payment, and whether the wind-down of Omnicare marks the end of CVS’s long-term care exposure or the start of a wider reckoning for the chain pharmacy model.
