Court addresses action over CVS and Rite Aid over-billing for generic drugs

Under the Public Health Code, a pharmacy that dispenses a generic equivalent drug to customer is obligated to pass on the cost savings to the purchaser or the third-party payor. Marcia Gurganus filed a lawsuit against several pharmacies, including Rite Aid and CVS alleging that they failed to comply with this act and that they were guilty of Medicaid fraud as a result. The Defendants argued that Gurganus did not have standing to sue because public disclosures of the Defendants' profits in the media made her ineligible to file a so-called qui tam action on behalf of the State. The trial court had agreed and dismissed Gurganus' action but the Sixth Circuit reversed; it held that the limited public disclosures of the Defendants' profit-making activities did not constitute a public disclosure of the fraud that Gurganus alleged.