Jury orders Lilly to pay $61M in whistleblower Medicaid fraud case

An Illinois jury has ordered Indianapolis-based Eli Lilly and Co. to pay $61 million in damages in a lawsuit filed eight years ago by a whistleblower who said the company made false claims about rebates to the federal Medicaid program.

The cost to Lilly, however, would reach more than $183 million because cases brought under the False Claims Act triple the final judgment, according to a press release from the law firm representing whistleblower Ronald J. Streck. He is a former executive of a network of regional drug wholesalers.

Lilly said in a written statement that it plans to appeal and is confident that it will prevail.

The $61 million award is the latest in Streck’s series of successful False Claims Act lawsuits against drug manufacturers for alleged misconduct involving the Medicaid Drug Rebate Program, according to Streck’s lead counsel, Dan Miller of Walden Macht & Haran.

Those legal actions include a $75 million settlement with Bristol Myers Squibb and an $18 million settlement with Astellas Pharma U.S. last year.

“The jury has spoken. Eli Lilly knowingly violated the False Claims Act and defrauded the Medicaid Program of $61 million in taxpayer money,” Miller said in written remarks.  “We took on one of the biggest pharmaceutical companies in the world, and one of the largest law firms in the world, and we won.”

A federal judge ruled in February that Streck’s legal team had established that Lilly made false statements to the Centers for Medicare and Medicaid Services about the prices it charged distributors for its drugs.

Lilly said in a statement that it is “committed to upholding high standards of corporate conduct in our business dealings. We are obviously disappointed with the jury’s verdict and we are confident that Lilly will ultimately prevail in this case. We will be seeking to vacate the jury’s verdict and for judgment to be entered in Lilly’s favor given binding Supreme Court and Seventh Circuit precedents.”

Lilly was represented in the case by Kirkland & Ellis LLP, Troutman Pepper Hamilton Sanders LLP and Faegre Drinker Biddle & Reath LLP.

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