The whistleblower complaint against Eli Lilly has now gone to a jury trial.
On February 28, Judge Harry D. Leinenweber rule The lawsuit against Eli Lilly for allegedly shortening the Centers for Medicare and Medicaid Services (CMS) on rebates will go ahead despite Lilly’s request to drop the case.
The ruling, filed Monday in the Eastern District Court of Illinois, is the latest in several years of legal back-and-forth over Indianapolis-based Eli Lilly’s rebate payments between 2005 and 2016.
Whistleblower Ronald J. Streck filed preliminary lawsuit against Eli Lilly, alleging the drugmaker violated the False Claims Act by filing false representations and certifications in the U.S. and several states in its Medicaid rebate program, ultimately underpaying cost.
Lilly participates in the Medicaid Rebate Program (MDRP), in which participating drug manufacturers must provide rebates to the government and state governments to allow Medicaid patients to use their drugs.The amount of the rebate is determined by the Average Manufacturer Price (AMP), which Congress defined in 1991 as “the [United] Wholesalers distribute medicines to states in the retail pharmacy industry,” the filing said.
In addition, the ruling explained that AMPs “must be adjusted by the manufacturer” if cumulative discounts or other arrangements subsequently adjust the actual realized price. For example, when the price goes up, the amount of the rebate should also go up.
However, the 1991 agreement did provide leeway for drug manufacturers to calculate AMPs on their own without specific guidance. Eli Lilly claims this was something CMS did before it issued a clarifying rule in 2016, the documents show.
Monday’s ruling found otherwise, outright calling Eli Lilly’s interpretation of AMP prior to 2016 “objectively unreasonable.”
As a result of Monday’s ruling, a jury trial will finally determine whether Eli Lilly acted knowingly, not counting AMPs as high as they should be between 2005 and 2016, and whether it caused 26 state and federal Medicaid agencies loss of government.
Lilly did not respond to a request for comment at the time of publication.
Photo: Eli Lilly and Company
