Eli Lilly Fights $183M Medicaid Fraud Judgment, Cites Reasonable Interpretation Of Medicaid Rules

On Wednesday, Eli Lilly And Co LLY has urged a federal appeals court to overturn a $183 million judgment stemming from accusations of defrauding Medicaid.

The case, initiated in 2014, alleges that Eli Lilly underreported drug prices to Medicaid, resulting in smaller rebates owed to the program.

Last week, Walgreens Boots Alliance Inc. WBA agreed to pay $106.8 million to settle allegations that it submitted false claims to government healthcare programs, violating the False Claims Act and state regulations.

The U.S. pharma giant claims it is being wrongfully held liable despite adhering to its interpretation of Medicaid’s complex rebate requirements.

The claims also highlight that Eli Lilly failed to disclose price increases billed to distributors, which were not reflected in its Medicaid pricing reports.

Reuters noted that Eli Lilly started reporting price increases after a 2017 rule change, though the company claims it had previously informed regulators about its pricing practices without facing any objections.

In 2022, a U.S. District Judge rejected Eli Lilly’s motion for summary judgment, ruling that its price statements were misleading and allowing the case to proceed. In May 2023, a jury found Eli Lilly responsible for $61 million in damages, which were tripled to $183 million under the federal False Claims Act.

Most recently, Oak Street Health, a subsidiary of CVS Health Inc CVS, agreed to settle for $60 million following allegations that it violated the False Claims Act.

The claims involved paying kickbacks to third-party insurance agents to recruit seniors to its primary care clinics, a practice that led to false Medicare submissions.

The case has garnered attention from major business groups, including the U.S. Chamber of Commerce and Pharmaceutical Research and Manufacturers of America (PhRMA). These organizations argue that upholding the judgment would create uncertainty for regulated companies.

Price Action: LLY stock is trading higher by 1.45% to $928.28 premarket at the last check on Friday.

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

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