WASHINGTON -- The Supreme Court on Thursday unanimously revived whistleblower lawsuits claiming that supermarket and pharmacy chains SuperValu and Safeway overcharged government health-care programs for prescription drugs by hundreds of millions of dollars.
The decision gives the whistleblowers another chance to pursue their claims that the companies defrauded the Medicare and Medicaid programs when they reported retail prices for generic prescription drugs, even though they had mainly been sold to customers at deeply discounted prices.
The cases stem from the companies’ effort to match a 2006 decision by Walmart to offer 30-day supplies of many generic drugs for $4.
SuperValu and Safeway matched the discounted price at their pharmacies, but they reported to the federal and various state governments a much higher “usual and customary” price when seeking reimbursement.
The 7th U.S. Circuit Court of Appeals dismissed the suits against both companies, holding that their decisions to report the higher prices were “not objectively unreasonable” under the federal False Claims Act.
Writing for the high court Thursday, Justice Clarence Thomas wrote that the appeals court applied the wrong standard. “What matters for an FCA case is whether the defendant knew the claim was false,” Thomas wrote.
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