The U.S. Supreme Court has declined to hear Eli Lilly's challenge to a Civil War-era whistleblower law, upholding a $183 million judgment against the drugmaker for defrauding Medicaid. The justices rejected the company's appeal of a lower court ruling, which had affirmed the jury verdict.
The case originated from a 2014 whistleblower lawsuit filed by Ronald Streck, a lawyer and pharmacist, who accused Eli Lilly of short-changing drug rebates to Medicaid. The company denied wrongdoing. The lawsuit was brought under the False Claims Act, also known as Lincoln's Law, which allows private individuals to sue on behalf of the government and share in recoveries.
Eli Lilly argued that the law's whistleblower provisions violate the U.S. Constitution by placing too much executive power in private hands. The company's lawyers stated that the law transforms private citizens into 'ersatz executive officers' without meaningful supervision. The Supreme Court's decision not to hear the case leaves the lower court's ruling intact.
The False Claims Act was enacted in 1863 to combat fraud by defense contractors during the Civil War. It was strengthened in 1986. In this case, a federal jury found in 2022 that Eli Lilly knowingly concealed retroactive price increases on some drugs and failed to rebate Medicaid accordingly. The U.S. government recovered over $330 million in the case, according to Justice Department data.
