The cost and pricing of pharmaceuticals are matters of substantial scrutiny. In March 2025, a jury in an Illinois federal court decided in favor of a pharmacy chain that its false claims for medication reimbursement did not damage the federal government. This case was litigated over 14 years and included a review by the US Supreme Court.1
A central issue in the case involved the determination of the pharmacy’s usual and customary (U&C) price, and whether the pharmacy acted with knowledge that the U&C price submitted to Medicare was wrong. A definition of U&C pricing is not available in statute, but there is a guidance definition from the Centers for Medicare & Medicaid Services: the price that an out-of-network pharmacy or a physician’s office charges a patient who does not have any form of prescription drug coverage for a covered Part D drug.2
In the legal system, most prohibited conduct hinges on the intent of the defendant party. The intent or knowledge that a party is acting with wrongdoing is referred to as scienter.3 In this case, the pharmacy chain was alleged to have knowingly misrepresented its U&C price to the government. The chain used a price-matching program that gave substantial discounts, below their U&C, for customers to transfer in their prescriptions. The pharmacy is alleged to have submitted its retail price to the government as its U&C price and did not factor in the price-matching discounts. Accordingly, this action would be...
The cost and pricing of pharmaceuticals are matters of substantial scrutiny. In March 2025, a jury in an Illinois federal court decided in favor of a pharmacy chain that its false claims for medica...