Returns the case to the Seventh Circuit.
The justices of the Supreme Court unanimously voted to revive claims brought by whistleblowers alleging SuperValu and Safeway defrauded the federal government by significantly overcharging them for prescription drugs.
Companies provide prescription drugs to Medicare and Medicaid recipients by selling the drugs to patients first, then requesting financial reimbursement afterward by submitting the receipts to the Medicare and Medicaid programs.
Whistleblowers noticed that the two major pharmacies’ prescription drug receipts and reimbursement filings were significantly different, selling the drugs to customers at deeply discounted prices while requesting reimbursements at much higher rates. They estimated that the total difference between the receipts and reimbursements was worth hundreds of millions of dollars.
SuperValu and Safeway were then sued for violating the False Claims Act (FCA). The 7th U.S. Circuit Court of Appeals dismissed the suits against both companies, saying that their price hikes were “not objectively unreasonable” business decisions and so don’t qualify as false claims.
However, the Supreme Court pointed out that it does not matter that the price hike could be seen as a reasonable decision for businesses to make. “What matters for an FCA case is whether the defendant knew the claim was false,” Justice Clarence Thomas wrote in the opinion of the court. Now that the 7th Circuit Court’s dismissal is overturned, the...
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