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Safeway Defeats Whistleblower’s Drug Pricing Fraud Appeal

April 5, 2022, 7:14 PM

Safeway Inc. defeated a whistleblower’s attempt to reinstate his False Claims Act suit alleging that the company overcharged federal health-care programs for prescription drugs, the Seventh Circuit said Tuesday in a split decision.

Thomas Proctor alleged that Safeway knowingly submitted false claim to Medicare and Medicaid between 2006 and 2015 when it reported its retail price for certain drugs as its “usual and customary price,” even though general public customers paid much less than the retail price.

But the district court properly found that Safeway’s pricing practices were objectively reasonable, and that no authoritative guidance cautioned against its interpretation of ...