On March 5, 2025, SuperValu, Inc. (SuperValu), a grocery store chain that operates in-store pharmacies, was cleared of liability by a Central District of Illinois federal jury—finally quashing whistleblower claims that the company improperly over-billed the government and violated the False Claims Act (FCA). This jury verdict came after a long 14-year battle, which included a Supreme Court reversal of lower court decisions on the FCA’s scienter standard.
In 2006, SuperValu’s pharmacies began discounting generic drugs through a price-matching system (if a customer provided evidence of a cheaper price for certain drugs available at another pharmacy, SuperValu would match that price) and other loyalty programs. Many of SuperValu’s customers took advantage of these programs. However, when the company reported its “usual and customary” price to federal and state governments for reimbursement, SuperValu reported the much higher retail price of the drugs. After these programs ended, whistleblowers brought suit against SuperValu under the FCA’s qui tam provision. In the qui tam actions, plaintiffs alleged that SuperValu offered discounted pricing through these programs to so many customers that the discounted price was effectively their “usual and customary” price. As SuperValu did not offer the discounted pricing to Medicare and Medicaid, which were required by law to be charged the “usual and customary price,” the whistleblowers alleged SuperValu overcharged the government for...
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