Kmart pays $35.3M to settle hard-fought whistleblower case alleging inflated prescription drug prices
The "qui tam" (whistleblower) case – filed in 2008 by Phillips & Cohen on behalf of former Kmart pharmacist
The
This case stands out because the whistleblower's attorneys, Phillips & Cohen joined by co-counsel
The False Claims Act requires the government to decide whether it will join a qui tam case, which depends on many factors. When the government does not intervene, the law allows whistleblowers to litigate qui tam lawsuits on their own to recover funds for the government.
"The settlement shows we were right to continue to pursue the case on behalf of taxpayers, despite the government's decision not to join the qui tam lawsuit," said
Kmart waged a fierce legal battle to get the qui tam case dismissed after it was unsealed seven years ago, taking the litigation all the way to the
The
"This was a hard-fought victory for our client and for taxpayers," said
For instance, according to the whistleblower's complaint, Kmart sold a 30-day supply of a generic version of a popular prescription drug for
Kmart argued in court that it could exclude the lower prices that it charged members of its discount program when determining the proper price – known as the "usual and customary price" – to charge government healthcare programs. But the appeals court shredded that argument.
"The 'usual and customary' price requirement should not be frustrated by so flimsy a device as Kmart's 'discount programs,'" the court wrote in its opinion.
Qui tam case citation: US et al. vs.
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Phillips & Cohen is the nation's most successful law firm representing whistleblowers, with recoveries for governments totaling more than
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