WASHINGTON, D.C. — The U.S. Supreme Court on June 1 revived two whistleblower lawsuits that allege Safeway and SuperValu overcharged the government for prescription drugs to the tune of $200 million.
The cases involved allegations that major retail pharmacies across the country knowingly overcharged Medicaid and Medicare by overstating what their “usual and customary prices” are. If they did, the pharmacies could be liable for triple damages.
The issue before the court was what the standard of proof is for determining whether the pharmacies acted “knowingly” under the False Claims Act, a federal law that dates back to the Civil War when it was enacted to combat fraud by private contractors who were overbilling or simply not delivering promised goods for the war effort.
Writing for a unanimous court, Justice Clarence Thomas said the modern-day version of that law clearly provides that vendors billing the government are liable for damages if they “believed that their claims were not accurate.”
Whistleblower Thomas Proctor sued Safeway while whistleblowers Tracy Schutte and Michael Yarberry sued SuperValu. Schutte is a Payson, Ill., native who lives in Hannibal, Mo., and works as a local pharmacist. Schutte and Yarberry are former college roommates who graduated in 1992 from the St. Louis College of Pharmacy.
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