The U.S. Supreme Court on Tuesday considered a bid by three whistleblowers to revive lawsuits accusing pharmacy operators of pocketing millions of taxpayer dollars by knowingly overbilling government health insurance programs for prescription drugs.
The justices heard arguments in an appeal by the whistleblowers of lower court rulings in favor of Safeway Inc, owned by Albertsons Companies Inc ACI.N, and SuperValu Inc, part of United Natural Foods Inc.
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The litigation was filed under a law called the False Claims Act that lets individuals sue on behalf of the U.S. government when they have evidence of fraud against federal programs. The whistleblowers, seeking monetary damages, accused the companies of offering prescription drugs at discounted prices to most customers paying out of pocket, while improperly charging higher rates to the government.
Government healthcare programs reimburse pharmacies for dispensing covered drugs to beneficiaries.
At issue is whether companies can avoid liability for fraud by showing that an “objectively reasonable” reading of the law supported their conduct — regardless of whether they truly believed that interpretation at the time of their alleged wrongdoing.
Tejinder Singh, a lawyer for the whistleblowers, told the justices that embracing...
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