The U.S. Supreme Court on Monday declined to hear a challenge from drugmaker Eli Lilly to a Civil War-era whistleblower law. This law has recovered billions of dollars by allowing private individuals to bring fraud lawsuits on behalf of the federal government.
The justices rejected Lilly’s appeal of a lower court’s ruling, which upheld a $183 million judgment from a whistleblower lawsuit against the drugmaker for defrauding Medicaid. Lilly had argued that granting such power to private citizens violates the U.S. Constitution.
The case originated from a 2014 whistleblower lawsuit against Lilly by Ronald Streck, a lawyer and pharmacist.
He accused the company of short-changing drug rebates to Medicaid, the health insurance program for low-income people funded by states and the federal government. Lilly denied wrongdoing.
Streck sued under the False Claims Act, a law allowing private individuals to sue on the government’s behalf and share in recoveries through its “qui tam” mechanism. “Qui tam” is an abbreviation for a Latin phrase meaning “Who sues on behalf of the King as well as for himself.”
Also known as Lincoln’s Law, the False Claims Act was passed by Congress and signed by President Abraham Lincoln in 1863. It was prompted by defense contractors billing the government for nonexistent or worthless supplies provided to the Union Army during the Civil War.
The law was strengthened in 1986. A federal jury in 2022 found Lilly knowingly concealed retroactive price increases on some drugs and then failed to rebate Medicaid on the higher prices.
A jury awarded $183 million under the False Claims Act. The Chicago-based 7th U.S. Circuit Court of Appeals upheld the jury verdict in 2025, prompting the company’s appeal to the Supreme Court.
Lilly stated the False Claims Act’s whistleblower provisions violate the U.S. Constitution by placing too much federal executive power in the hands of individuals not accountable to the U.S. president.
“Fundamentally, executive authority is bestowed upon private citizens with no meaningful supervision or direction, transforming bounty hunters into ersatz executive officers and paying them (and their private attorneys) a pretty penny in the process,” their lawyers wrote in a court filing.
“None of that is consistent with our constitutional structure.”
The U.S. government recovered over $330 million, according to U.S. Justice Department data.
