United States ex rel. Sheldon v. Allergan Sales, LLC, No. 20-2330 (4th Cir. 2022)
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Plaintiff filed a False Claims Act qui tam suit against his employer, Forest Laboratories, alleging that it engaged in a fraudulent price reporting scheme under the Medicaid Drug Rebate Statute by failing to aggregate discounts given to separate customers for purposes of reporting "Best Price."
The Fourth Circuit affirmed the district court's dismissal of plaintiff's complaint, concluding that because Forest Laboratories' reading of the Rebate Statute was at the very least objectively reasonable and because it was not warned away from that reading by authoritative guidance, it did not act "knowingly" under the Act. In this case, Forest Laboratories made eminently reasonable assumptions based on the statutory text, and CMS invited assumptions precisely of this sort. The court noted that the government is not without recourse. Should Congress so wish, it can alter the Rebate Statute to require the aggregate reporting of discounts to separate entities.
The court issued a subsequent related opinion or order on May 10, 2022.
The court issued a subsequent related opinion or order on September 23, 2022.
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