Federal Appeals Court Upholds $183.7M Medicaid Fraud Award Against Eli Lilly

Eli Lilly must pay $183.7M in damages for allegedly defrauding the Medicaid drug pricing program. A federal appeals court upheld a lower court ruling, rejecting the drugmaker's bid to overturn the award. The lawsuit alleged that Lilly engaged in a scheme to overcharge Medicaid for certain drugs.

Eli Lilly and Company (LLY), the Indiana-based pharmaceutical giant, has been ordered to pay $183.7 million in damages following a federal appeals court ruling that upheld a lower court decision. The ruling stems from a lawsuit alleging that Lilly defrauded the Medicaid drug pricing program by retroactively increasing drug prices without rebating the higher amounts to Medicaid Eli Lilly’s bid to overturn $183.7M Medicaid fraud award denied in appeals court ruling^[1].

The case, brought by whistleblower Ronald Streck, a pharmacist and lawyer, initially resulted in a $61 million judgment against Lilly in August 2022. However, a subsequent trial judge determined that the company should pay $183 million under the "trebled" damages rules in the False Claims Act. The U.S. Court of Appeals for the Seventh Circuit in Chicago rejected Lilly's challenges to this award, noting that the jury's finding was reasonable and that Lilly had knowingly concealed price hikes and failed to rebate Medicaid for higher prices Eli Lilly’s bid to overturn $183.7M Medicaid fraud award denied in appeals court ruling^[1].

The appeals court also dismissed Streck's claim for a harsher penalty, stating that the trial judge's initial undercount of Lilly's violations was corrected in the subsequent judgment. The ruling underscores the importance of compliance with federal regulations and the potential financial consequences for companies that engage in fraudulent practices.

This development may have implications for Eli Lilly's financial performance and its stock price. Investors should closely monitor the company's response to this ruling and any potential legal or financial actions that may follow. As of the current date, Eli Lilly has not issued a formal statement regarding the ruling.

References:
Eli Lilly’s bid to overturn $183.7M Medicaid fraud award denied in appeals court ruling^[1] Seeking Alpha, "Eli Lilly Loses Appeal Overturning $183.7M Medicaid Fraud Award," https://seekingalpha.com/news/4494190-eli-lilly-loses-appeal-overturn-1837m-medicaid-fraud-award