Listen to this articleWASHINGTON – On Monday, the U.S. Supreme Court declined to review a challenge posed by pharmaceutical giant Eli Lilly regarding a whistleblower law that dates back to the Civil War era. This law has enabled private citizens to file fraud lawsuits on behalf of the federal government, resulting in the recovery of billions of dollars.
The justices chose not to intervene in Lilly’s appeal against a lower court ruling which had confirmed a $183 million judgment linked to a whistleblower lawsuit claiming that the drugmaker engaged in fraudulent practices concerning Medicaid funding. Eli Lilly contended that the delegation of such power to private individuals infringes upon the U.S. Constitution.
This controversy originated from a whistleblower lawsuit filed in 2014 by Ronald Streck, who is both a lawyer and pharmacist. He accused Eli Lilly of under delivering on drug rebates owed to Medicaid, the health insurance program designed for low-income individuals, which is funded by both state and federal governments. The company has consistently denied any allegations of wrongdoing.
Streck invoked the False Claims Act, legislation that permits private citizens to take legal action on behalf of the government, allowing them to share in any financial recoveries through what is known as the “qui tam” provision. The term “qui tam” is derived from a Latin phrase that translates to “Who sues on behalf of the King as well as for himself.”
Enacted in 1863 and known as Lincoln’s Law, the False Claims Act was initially introduced by Congress and signed by President Abraham Lincoln in response to the fraudulent billing practices of defense contractors during the Civil War, who were charging the government for nonexistent supplies. This landmark law was subsequently strengthened in 1986.
A federal jury ruled in 2022 that Eli Lilly had deliberately concealed price increases on certain drugs and subsequently failed to rebate Medicaid based on these inflated prices. The jury initially awarded $61 million in damages, a figure that was automatically tripled to $183 million under the provisions of the False Claims Act. This verdict was upheld by the 7th U.S. Circuit Court of Appeals in 2025, which led to Lilly’s appeal to the Supreme Court.
The company argued that the whistleblower provisions of the federal False Claims Act infringe on U.S. Constitutional principles by empowering private citizens with excessive federal executive power, which they claim lacks accountability to the U.S. president.
“Fundamentally, executive authority is bestowed upon private citizens with no meaningful supervision or guidance, transforming bounty hunters into ersatz executive officers and compensating them (along with their private attorneys) handsomely in the process,” Lilly’s legal team stated in a court document. “None of that aligns with our constitutional framework.”
According to data from the U.S. Justice Department, more than $6.8 billion was recovered by the government through settlements and judgments in False Claims Act cases during the 2025 fiscal year, with qui tam whistleblowers receiving over $330 million.
Reporting by John Kruzel; editing by Will Dunham.
