On Tuesday, the U.S. Supreme Court heard arguments in an appeal by three whistleblowers seeking to revive lawsuits against pharmacy operators for allegedly overbilling government health insurance programs for prescription drugs. Safeway Inc, owned by Albertsons Companies Inc, and SuperValu Inc, part of United Natural Foods Inc, were previously cleared of wrongdoing in lower court rulings. The lawsuits were filed under the False Claims Act, which permits individuals to sue on behalf of the U.S. government when they have evidence of fraud against federal programs. The whistleblowers claim that the companies offered prescription drugs at discounted prices to most customers paying out of pocket while charging the government improperly inflated rates. The whistleblowers are seeking monetary damages.
Pharmacies receive reimbursements from government healthcare programs when they dispense covered drugs to beneficiaries.
During arguments, the whistleblowers' attorney, Tejinder Singh, warned that adopting this legal standard "would permit some of the worst offenders to escape liability."
However, some conservative justices expressed apprehension that a ruling in favor of the whistleblowers might prompt judges to determine the truthfulness of legal advice - a notion that Justice Brett Kavanaugh disagreed with.
"If you say (to the government), it's $20, and you're charging everyone $10, okay, false. I get that. But if it's based on a legal understanding, it's a little hard for me to say your legal view is false," Kavanaugh said.
The U.S. Supreme Court is considering a case where three whistleblowers seek to revive lawsuits against pharmacy operators. The whistleblowers allege that the pharmacy operators overcharged government health insurance programs for prescription drugs, resulting in the pharmacy operators pocketing millions of taxpayer dollars. The litigation was filed under the False Claims Act, which permits individuals to sue on behalf of the U.S. government when there is evidence of fraud against federal programs. The pharmacy operators argue that they should not be held responsible for fraud because their actions were based on an "objectively reasonable" reading of the law, regardless of whether they genuinely believed that interpretation at the time of their alleged wrongdoing. The whistleblowers argue that embracing this legal standard would allow some of the worst offenders to avoid liability. The pharmacy operators claim that the Medicare and Medicaid billing requirements were unclear, and their actions were based on an absolutely, objectively reasonable interpretation of the law. The 7th U.S. Circuit Court of Appeals ruled in favor of the pharmacy operators, stating that they could not be held responsible for fraud given the objectively reasonable interpretation of the law. The Biden administration backed the whistleblowers, arguing that the ruling undermines the False Claims Act. The Supreme Court is expected to deliver a verdict by the end of June.
