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Eli Lilly to Pay $61 Million in Medicaid Pricing Fraud Suit (1)

Aug. 4, 2022, 3:47 PMUpdated: Aug. 4, 2022, 4:20 PM

An Illinois jury said Eli Lilly and Co. must pay $61 million in a whistleblower’s fraud suit alleging that the company made false claims about pricing under Medicaid’s drug rebate program.

The trebled False Claims Act damages amount would exceed $183 million, plus penalties, according to a Wednesday press release by whistleblower Ronald J. Streck’s law firm, Walden Macht & Haran LLP.

“The jury has spoken. Eli Lilly knowingly violated the False Claims Act and defrauded the Medicaid Program of $61 million in taxpayer money,” said Dan Miller of Walden Macht & Haran LLP, lead counsel for Streck.

“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,” he said.

A spokesperson for Eli Lilly said the company “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.”

Streck filed the suit in 2014 concerning Medicaid’s drug rebate program, under which the rebates drugmakers are required to pay are based on average manufacturer prices submitted to the government.

Streck alleged that Eli Lilly initiated retroactive price increases on its drugs, and failed to pay Medicaid rebates on new, higher drug prices, the press release said.

The government declined to intervene in 2018.

Streck showed that Eli Lilly’s calculations and related certifications about “Average Manufacturers Price"—which affected payments to the government—were factually and legally false, the US District Court for the Northern District of Illinois said in a Feb. 28 ruling.

Kirkland & Ellis LLP; Troutman Pepper Hamilton Sanders LLP; and Faegre Drinker Biddle & Reath LLP represented Eli Lilly. Behn & Wyetzner Chartered; Walden Macht & Haran LLP; Martin Law PC; Berger & Montague represented Streck.

The case is United States ex rel. Streck v. Takeda Pharm. Am Inc., N.D. Ill., No. 14-cv-9412, 8/3/22.

(Updates story with comment from Eli Lilly in fifth paragraph.)

To contact the reporter on this story: Daniel Seiden in Washington at dseiden@bloomberglaw.com

To contact the editors responsible for this story: Rob Tricchinelli at rtricchinelli@bloomberglaw.com; Patrick L. Gregory at pgregory@bloomberglaw.com