The False Claims Act (FCA) is one of the federal government’s most effective tools for recovering money lost to fraud. Originally enacted during the Civil War to combat defense contractor fraud, the FCA has evolved into a broad anti-fraud statute that covers any false or fraudulent claim submitted to the government.
What makes the FCA unique is its whistleblower provision. Private citizens, called relators, can file suit on behalf of the government against entities that have defrauded federal programs and unfairly taken our tax money. If the government recovers money, the relator receives a share of the proceeds. This structure was designed to enlist private citizens in the fight against fraud, particularly in areas where the government lacks the resources to police every transaction.
The FCA and Drug Pricing
When drug manufacturers are accused of inflating prices and those inflated prices flow through to Medicaid, Medicare, and other government programs, the government overpays. That overpayment is the kind of financial loss the FCA was built to address.
In the Adventist case, the plaintiff alleged that drug manufacturers knowingly charged prices above the statutory 340B ceiling, causing covered entities to submit claims to government programs (such as Medicaid) at inflated rates. The government allegedly paid more than it should have. The FCA provided the mechanism to recover those losses.
The Ninth Circuit’s Endorsement
The Ninth Circuit Court of Appeals’ opinion in the Adventist case emphasized that the FCA should be interpreted broadly to reach all types of fraud that cause financial loss to the government. The court noted that Congress specifically designed the FCA to be used by private whistleblowers and that creating exceptions not found in the statute would undermine congressional intent.
The court also pointed to its own precedent: the FCA has consistently been available to parties even when other statutory causes of action are not. The appeals court judge stated that the absence of a private right of action under Section 340B does not close the door to FCA claims; these are separate legal pathways.
The Connection to Sagebrush
While Sagebrush’s claims against Amgen are brought under state law rather than the federal FCA, the principle is the same. Legal claims arising from independent obligations are not barred simply because they involve conduct related to 340B pricing. The Adventist decision reinforces that principle at the federal level, and Sagebrush’s supplemental authority filing brings that reasoning to bear in its own case.