Reuters) – A federal judge in Chicago on Monday rejected Eli Lilly’s bid to end a whistleblower lawsuit that accused the drug manufacturer of shortchanging the Medicaid Rebate Program between 2005 and 2016.
U.S. District Judge Harry Leinenweber denied Lilly’s motion for judgment and said the plaintiff, Ronald Streck, had cleared the first of four hurdles under the False Claims Act by establishing that Lilly had made false statements to the Centers for Medicare and Medicaid Services about the prices it charged distributors for its drugs.
Lilly argued that the pricing rules were ambiguous until CMS issued guidance on it in 2016, but “the explicit text of the (Affordable Care Act) makes Lilly’s position unreasonable,” Leinenweber said.
A jury will still need to decide whether Lilly’s actions were intentional, material and caused a loss to the federal government and Medicaid agencies in 26 states, the judge added.
Even so, the ruling will have a “huge impact,” said Streck’s lead lawyer, Daniel Miller of Walden Macht & Haran.