Page:U.S. ex rel. Schutte v. SuperValu.pdf/8

Rh drugs were made at those discounted prices. And, according to petitioners, 88% of Safeway’s 2014 cash sales for its top 20 generic drugs were at discounted rates.

Petitioners contend that those discounted prices were actually respondents’ “usual and customary” prices—and that, rather than submitting those lower prices for reimbursement, respondents instead reported their higher, non-discounted prices. For example, petitioners have presented evidence that Safeway charged just $10 for 94% of its cash sales for a 90-day supply of a cholesterol drug between 2008 and 2012. Yet Safeway apparently reported prices as high as $108 as “usual and customary” during that time. And petitioners presented evidence that, at least at some times and for some drugs, SuperValu made more than 80% of its cash sales for prices less than what it disclosed as its “usual and customary” price.

To be sure, the phrase “usual and customary” on its face appears somewhat open to interpretation. But petitioners contend that respondents were informed that their lower, discounted prices were their “usual and customary” prices, believed their discounted prices were their “usual and customary” prices, and tried to hide their discounted prices from regulators and contractors. Petitioners have presented evidence that they claim supports that theory. For example, both SuperValu and Safeway received a notice in 2006 from a pharmacy benefit manager stating that the phrase “usual and customary” refers to discounted prices; Safeway apparently received the same message from state Medicaid agencies. And executives at both companies raised concerns about letting state agencies or pharmacy benefit managers find out about their discounted prices.

For example, some emails between SuperValu executives described their discount program as a “stealthy approach” and noted concern for the “integrity” of their “U&C price” claims. App. to Pet. for Cert. in No. 21–1326, p. 67a (internal quotation marks omitted). An executive at Safeway