According to a press release issued by the lawyers for whistleblower Ronald J. Streck (“Streck”), a former executive of a network of regional drug wholesalers, a jury ordered Eli Lilly and Company (“Eli Lilly”) to pay in excess of $61 million in damages, which will be tripled to more than $183 million under under the False Claims Act, more than eight years after Streck filed a False Claims Act lawsuit alleging that Eli Lilly underpaid the rebates that drug manufacturers are required to pay under the Medicaid Drug Rebate Program.
Under the Medicaid Drug Rebate Program, the rebates that drug manufacturers are required to pay are based on average manufacturer prices submitted by drug manufacturers to the Government. Streck’s lawsuit, which was filed in 2014 and in which the Government chose to not intervene in 2018, alleged that Eli Lilly initiated retroactive price increases on its drugs, and failed to pay Medicaid rebates on the new, higher drug prices.
The case is captioned U.S. ex rel. Ronald Streck et al. v. Takeda Pharmaceuticals America, Inc. No. 1:14-cv-09412, United States District Court for the Northern District of Illinois.
Streck is no stranger to whistleblower lawsuits against drug manufacturers for alleged misconduct involving the Medicaid Drug Rebate Program. His prior successful False Claim Act lawsuits include a $75 million settlement with Bristol Myers Squibb and an $18 million settlement with Astellas Pharma U.S. In total, Streck’s whistleblower lawsuits have resulted in more than $350 million in recoveries for the Medicaid program.
Streck’s lawyer, who has represented Streck in all of his False Claims Act whistleblower lawsuits, stated after the most recent victory, “The jury has spoken. Eli Lilly knowingly violated the False Claims Act and defrauded the Medicaid Program of $61 million in taxpayer money. 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. We are very proud to represent Mr. Streck in this quest, which began more than eight years ago.”
Medicaid Drug Rebate Program (MDRP)
The Medicaid Drug Rebate Program (MDRP) requires a drug manufacturer to enter into, and have in effect, a National Drug Rebate Agreement (NDRA) with the Secretary of the Department of Health and Human Services (HHS) in exchange for state Medicaid coverage of most of the manufacturer’s drugs. When a manufacturer markets a new covered outpatient drug (COD), it must also submit product and pricing data concerning the drug to CMS via the Medicaid Drug Programs (MDP) system. This ensures that states are aware of the newly marketed drug. In addition, Section II(g) of the NDRA explains that manufacturers are responsible for notifying states of a new drug’s coverage. Manufacturers are required to report all CODs under their labeler code to the MDRP. Manufacturers may not be selective in reporting their National Drug Code’s (NDC) to the program. Manufacturers are then responsible for paying a rebate on those drugs for which payment was made under the state plan. These rebates are paid by drug manufacturers on a quarterly basis to states and are shared between the states and the Federal government to offset the overall cost of prescription drugs under the Medicaid Program.
If you have information regarding false claims having been submitted to Medicare, Medicaid, TRICARE, other federal health care programs, or to other federal agencies/programs, and the information is not publicly known and no actions have been taken by the government with regard to recovering the false claims, you should promptly consult with a False Claims Act attorney (also known as qui tam attorneys) in your U.S. state who may investigate the basis of your False Claims Act allegations and who may also assist you in bringing a qui tam lawsuit on behalf of the United States, if appropriate, for which you may be entitled to receive a portion of the recovery received by the U.S. government.
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