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Eli Lilly and Co. is asking the U.S. Supreme Court to overturn part of a Civil War-era law that allows private whistleblowers to sue for fraud on behalf of the federal government.
The Indianapolis-based drugmaker is challenging a $183.7 million judgment in a case brought by a pharmacist who alleged Lilly made false claims about rebates to the federal Medicaid program. The company is asking justices to strike down the “qui tam” provision of the False Claims Act and declare that it violates the separation of powers outlined in Article II of the U.S. Constitution.
Lilly said the whistleblower provisions of the federal False Claims Act violate the U.S. Constitution by placing too much authority in the hands of people, described in the petition as “bounty hunters” and “vigilantes,” who are not accountable to the U.S. president, according to a filing made Thursday.
“The Constitution does not permit prosecution by private vigilantes,” Lilly wrote in its petition. “Nor does it allow regulation by hindsight. And it certainly does not tolerate combining the two to subject unwitting regulated entities to massive treble damages verdicts.”
Lawyers representing Lilly did not immediately respond to a request for comment by IBJ. Attorneys representing Ronald J. Streck, a former executive of a national network of regional drug wholesalers who won a lawsuit against Lilly in 2015, also did not immediately respond to a request for comment.
The False Claims Act, also known as the Lincoln Law, was enacted in 1863 in response to defense contractor fraud during the Civil War. The act was strengthened in 1986 and allows private citizens to sue any individuals or companies that are defrauding the government and recover damages and penalties on the government’s behalf.
Whistleblowers who bring successful qui tam cases are entitled to rewards of 15% to 30% of what the government recovers.
In January, the U.S. Department of Justice said settlements and judgments under the False Claims Act exceeded $6.8 billion in 2025. The amount was the highest in a single year in the history of the False Claims Act. Last year, whistleblowers filed 1,297 qui tam lawsuits, also the highest in a single year, and the government opened 401 investigations. Settlements and judgments since 1986 total more than $85 billion.
Last year, Supreme Court Justices Clarence Thomas, Brett Kavanaugh and Amy Coney Barrett signaled they would consider a constitutional challenge to the qui tam provision of the False Claims Act. A petition to the Supreme Court requires four justices to sign on to bring a complaint to the full court.
In 2023, a federal judge in Illinois tripled the damages in a jury verdict against Lilly. Judge Harry D. Leinenweber ruled the drugmaker must pay $183.7 million in a lawsuit filed by a whistleblower — Streck — who said the company made false claims about rebates to the federal Medicaid program.
Judge Leinenweber ruled that Indianapolis-based Lilly was liable for higher payments due to its behavior and federal law concerning penalties.
Streck and his lawyers argued that Lilly engaged in systematic misconduct for more than a decade (2005 to 2017), acted knowingly and expressed no remorse.
Streck accused Lilly of miscalculating drug rebates under the Medicaid program by leaving retroactive drug price increases out of it calculations.
Judge Leinenweber ruled in February 2022 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.
A federal jury found 43 federal violations before November 2015 and nine violations afterward. The jury in 2022 ordered Lilly to pay $61 million in damages.
The jury award was the latest in Streck’s series of successful False Claims Act lawsuits against drug manufacturers for alleged misconduct involving the Medicaid Drug Rebate Program.
Those legal actions include a $75 million settlement with Bristol Myers Squibb and an $18 million settlement with Astellas Pharma U.S.
Former IBJ reporter John Russell contributed to this report.
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