The U.S. Supreme Court on Monday declined to take up a constitutional challenge from drugmaker Eli Lilly regarding the False Claims Act, a statute dating to the Civil War era that permits private parties to sue on the government’s behalf. By refusing the company’s appeal, the justices left in place a lower court ruling that upheld a $183 million judgment tied to allegations Lilly defrauded Medicaid.
The dispute arises from a whistleblower lawsuit filed in 2014 by Ronald Streck, identified in court records as a lawyer and pharmacist. Streck accused Lilly of failing to provide proper rebates to Medicaid after the company allegedly applied retroactive price increases on certain drugs. Lilly has denied the allegations.
A federal jury in 2022 determined that Lilly knowingly concealed the fact it had increased prices retroactively on some medications and then did not rebate Medicaid based on those higher prices. The jury awarded $61 million in damages, which, under the False Claims Act, was automatically tripled to $183 million.
The Chicago-based 7th U.S. Circuit Court of Appeals affirmed that verdict in 2025, prompting Lilly to seek review by the Supreme Court. In its appeal, Lilly argued that the False Claims Act’s qui tam provisions unlawfully delegate executive power to private citizens. The company contended that the statute effectively entrusts executive authority to individuals who are not accountable to the president, creating what Lilly’s lawyers described in court filings as private bounty hunters operating without meaningful supervision.
"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," Lilly's attorneys wrote in a filing challenging the law.
The False Claims Act, commonly referred to as Lincoln’s Law, was enacted by Congress and signed by President Abraham Lincoln in 1863 after widespread fraud by defense contractors billing for supplies during the Civil War. The statute was later strengthened in 1986 and includes a qui tam mechanism that allows private citizens to bring fraud lawsuits on the government’s behalf and share in any recoveries. "Qui tam" abbreviates a Latin phrase meaning "Who sues on behalf of the King as well as for himself."
The U.S. Department of Justice reported that during the 2025 fiscal year the federal government recovered more than $6.8 billion in settlements and judgments under the False Claims Act, and that qui tam whistleblowers were awarded more than $330 million. Those figures were cited in court records as part of the broader context for the appeal.
With the Supreme Court's decision not to grant review, the 7th Circuit's affirmation and the underlying jury verdict remain in force. The outcome leaves intact both the monetary award in the Lilly case and the continued application of the False Claims Act’s qui tam provisions as they have been applied in this matter.
Key legal and financial elements of the case are straightforward in the court record: a 2014 whistleblower filing, a 2022 jury finding of knowing concealment related to retroactive price increases and rebate obligations to Medicaid, an automatic trebling of damages to reach $183 million under the False Claims Act, and an appellate affirmation in 2025 that was not disturbed by the Supreme Court.