Supreme Court Declines Eli Lilly Challenge, Leaves $183M False Claims Verdict Intact

The U.S. Supreme Court on Monday declined to review Eli Lilly's constitutional challenge to the False Claims Act, leaving in place a $183 million judgment tied to an alleged Medicaid rebate scheme.

The case stems from a 2014 qui tam complaint filed by Ronald Streck, a lawyer and pharmacist, who accused Lilly of failing to rebate Medicaid after retroactively increasing some drug prices. Lilly has denied wrongdoing.

Jury Verdict and Appeals

In 2022 a federal jury awarded $61 million in damages, which were automatically tripled to $183 million under the False Claims Act. The Chicago-based 7th U.S. Circuit Court of Appeals affirmed the verdict in 2025; Lilly then sought review by the Supreme Court, which declined the appeal.

Constitutional Challenge

Lilly argued that the False Claims Act's qui tam provisions unlawfully vest executive power in private citizens by allowing them to prosecute claims on the government's behalf with limited presidential supervision. In filings, the company warned that the statute "bestows executive authority upon private citizens with no meaningful supervision or direction," characterizing qui tam relators as de facto, unsupervised enforcers.

Statutory Background

The False Claims Act, often called "Lincoln's Law," was enacted in 1863 to combat wartime fraud and was strengthened by reforms in 1986. The statute permits private parties to sue on the government's behalf and to share in recoveries through its qui tam mechanism.

Impact

The Justice Department reported that it recovered more than $6.8 billion in False Claims Act settlements and judgments in fiscal year 2025, and that qui tam whistleblowers received over $330 million in awards. The Supreme Court's decision not to take up Lilly's appeal leaves the lower-court rulings and the multimillion-dollar recovery intact.

Reporting by John Kruzel; editing by Will Dunham.