Eli Lilly to pay triple damages for shorting Medicaid program

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Eli Lilly Medicaid overview:

• Who: An Illinois judge has tripled the damages imposed on Eli Lilly in a False Claims Act lawsuit.
• Why: The judge ruled the company was liable for treble damages in the case where it was accused of shorting the Medicaid program. 
• Where:  The Eli Lilly Medicaid case is in an Illinois federal court.

An Illinois federal judge has tripled the damages imposed on Eli Lilly in a False Claims Act lawsuit, ruling the company was liable for treble damages in a case where it was accused of shorting the Medicaid program. 

On May 9, U.S. District Judge Harry Leinenweber granted relator Ronald Streck’s bid for treble damages, tripling the $61 million in damages imposed on Eli Lilly & Co. to more than $183 million.

The case alleged the pharmaceutical company had engaged in a decade of drug rebate miscalculations under the Medicaid program.

“​​Relator asks for the Court to impose the maximum civil penalties, arguing Lilly engaged in systematic misconduct for over a decade (2005 to 2017), acted knowingly, and expressed no remorse,” Judge Leinenweber noted.

In August, a jury found Eli Lilly deliberately shorted the Medicaid program by leaving retroactive drug price increases out of the metrics it was required to include for drug rebate calculations.

“Under Section 3729 of the FCA, a defendant is liable for ‘3 times the amount of damages which the government sustains because of the act of [the defendant],'” the order states. “Defendants do not dispute that the relevant statutes call for the same.”

“The jury determined the actual damages to the federal and state governments to be $61,229,217,” it states. “This figure tripled amounts to $183,687,651.”

Eli Lilly failed to pay the government what it owed, lawsuit alleged

In his 2014 lawsuit, Streck claimed Eli Lilly unlawfully failed to pay the government what it owed after earning more than $500 million in clawbacks from drug wholesalers between 2005 and 2017.

Streck claimed the pharmaceutical company violated the False Claims Act and 26 states’ laws.

He alleged that Streck alleged Eli Lilly unlawfully shorted Medicaid under a government rebate agreement by hiding drug price increases in its calculations. Eli Lilly argued it could have calculated Medicaid’s rebate in a different way and paid even less, but it didn’t.

“Ultimately, while Lilly could have, of course, behaved better, it could have acted far worse,” the judge stated in his order.

Eli Lilly & Co. also has been hit with a class action lawsuit alleging it engages in discrimination against its older employees by systematically denying them promotions and giving them, instead, to their younger workers.

What do you think of the allegations against Eli Lilly? Let us know in the comments. 

Streck is represented by Daniel Miller, Derek Cohen and Jonathan DeSantis of Walden Macht & Haran LLP, Michael Behn of Behn & Wyetzner Chtd. and Robert Jackson Martin IV of Martin Law PC.

The Eli Lilly class action lawsuit is U.S., et al. v. Eli Lilly & Co., Case No. 1:14-cv-09412, in the U.S. District Court for the Northern District of Illinois. 

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