Indianapolis drugmaker Eli Lilly is asking the U.S. Supreme Court to rein in the False Claims Act’s powerful whistleblower provisions, arguing that a Civil War era law has turned private citizens into unaccountable enforcers of federal fraud cases. The high court petition stems from a long and costly fight over how Lilly reported drug prices to Medicaid, a battle that ended with a trebled judgment against the company.
In its new filings, Lilly argues that the False Claims Act’s qui tam setup lets profit-driven private relators press federal enforcement actions without the kind of presidential oversight the Constitution envisions. The company is also taking aim at a fee shifting rule that can stick defendants with a relator’s legal bills, even when the government has not taken over the case. The company’s constitutional arguments and fee shifting challenge are laid out in reporting from Reuters.
The case that brought Lilly to this point began back in 2014, when relator Ronald Streck sued under the False Claims Act. Streck alleged that Lilly misreported its Average Manufacturer Price for Medicaid rebate purposes. A federal jury in August 2022 sided with Streck and awarded roughly $61 million in damages. Under the False Claims Act’s trebling provision, that number jumped to about $183 million. The Seventh Circuit later upheld core findings on falsity, materiality and scienter, and the lengthy history of the case is recounted in the lower...
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