This matter is a False Claims Act case wherein the Relators alleged that Defendant pharmacies submitted false or fraudulent claims to obtain federal funds from Government Healthcare Programs to which Defendants were not entitled. The Relators alleged this occurred through the electronic submission of inflated usual and customary charges to Government Healthcare Programs because Defendants failed to report their cash price matches as their usual and customary prices.
On May 21, 2018, SuperValu (“Defendants”) filed its first motion to exclude Ian Dew and memorandum in support. On March 20, 2019, U.S. District Court Judge Richard Mills entered an order denying Defendants’ motion and concluding that Dew’s expert testimony should not be excluded based on methodology, reliability, or relevance.
On February 26, 2024, Defendants filed a second motion to exclude the testimony of Dew. Defendants argued that this Court should not follow the prior ruling of Judge Mills from 2019 because the ruling was incorrect considering the changes to Federal Rule 702 and based on a supplemental report of Dew.
Data Analytics Expert Witness
Ian Dew has a bachelor’s degree in mathematics and psychology, a Master of Engineering from the University of Virginia, and a Master of Environmental Science from Johns Hopkins. He has worked on complex, computer-assisted data analysis for more than 25 years, focusing on complex healthcare litigation since 2004.
Discussion by the Court
Defendants asked this Court to reconsider its prior ruling on Dew’s methodology and his application of this method in a more recent report. Specifically, Defendants took issue with a new report issued by Dew in December 2023. According to Defendants, this report, which the Relators describe as using the same methodology but filtered in a different way, is unreliable.
Relators pointed to the testimony of Dew regarding the filtering of results in the updated report. This filtering involved whittling down numbers, by “applying filters to identify a subset within the full set from my rebuttal report.” Further, Relators noted that the Actual Usual and Customary Prices that were filed in the supplemental report are the same prices and data as the first report just presented in a different manner.
Qualifications
The Court has, in 2019, discussed Dew’s qualifications at length and will not repeat each of those points. The Court finds based on the knowledge, skill and experience of Dew, that Dew is qualified to provide data analysis of large sets of electronic information.
Methodology
Defendants specifically highlighted Dew’s per-state, per-month analysis as unreliable. Defendants argued the record in this case established that the usual-and-customary price was determined based on a particular store’s prices on a particular day. Relators initially instructed Dew to assume that lower price matches that are widely available are the usual and customary prices that Defendants should have charged Government Healthcare Programs for their drugs. Dew analyzed the massive amounts of raw data provided by the Defendants and determined the best way to group information that could be plugged into an algorithm while excluding potential outliers. The Court noted that this methodology, in relying on information provided by others, including counsel, would be appropriate when rendering an opinion.
The specific methodology in calculating usual and customary pricing by using the most frequently occurring discounted cash price offered by month is a more conservative calculation according to Dew. Further, Dew testified that his use of the most frequently occurring price is recognized as a statistically valid method to find the central tendency of a large data set.
Defendants took issue with Dew’s alleged refusal to review government contracts for each of the Defendants. However, Dew’s work had a limited scope. He was asked to calculate the difference between the two types of price points found within Defendants’ data production: (1) discounted cash override prices and (2) reimbursement based upon undiscounted reported usual and customary prices.
To sum it up, Defendants’ arguments regarding Dew’s methodology are largely the same as their arguments in their initial motion, and the Court declines to reverse its earlier order regarding the exclusion of Ian Dew’s testimony.
Reliability
Defendants take issue with Dew’s per-state, per-month analysis, arguing that a per-store, per-day analysis is more appropriate. Further, Defendants argue that Dew’s lack of justification as to why he utilized a per-state, per-month analysis further supports Defendants position. Dew’s failure to review Pharmacy Benefit Manager contracts and failure to utilize geographic and time parameters specified by state Medicaid are two additional factors Defendants believe should have been considered. Lastly, Defendants point to the fact that Dew has indeed calculated hypothetical usual and customary prices using a per-store, per-quarter methodology.
Dew has testified as to his rationale for his analysis and his use of an alternate method in the past does not disqualify his conclusions in the present matter.
The Court found that Dew’s opinions and reports quantifying alleged overcharges regarding usual and customary price reflect a reliable application of his principles and methods.
Relevance
Defendants argued that Dew’s methods are irrelevant as they do not use the “relevant” unit of per-store, per-day usual and customary pricing which reflects the record in this matter.
However, the Court decided that Dew’s testimony and reports provide the type of context and analysis that would clearly assist a trier of facts in determining whether there were overcharges to Government Healthcare Programs. This testimony regarding how often these claims were submitted and the overages claimed above the usual and customary prices may be helpful to jurors as this subject matter is not within a juror’s usual scope of knowledge.
Held
The Court denied the Defendants’ motion to exclude the testimony of Ian Dew.
Key Takeaway:
Although Defendants took issue with the way Dew organized and grouped tens of millions of purchases, that alone is not enough to disqualify his opinion. Dew’s failure to review Pharmacy Benefit Manager contracts and failure to utilize geographic and time parameters specified by state Medicaid are two additional factors Defendants believe should have been considered. However, the Court is unpersuaded that Dew’s methodology has changed in any significant manner, so the Court will not reverse its prior ruling.
Case Details:
| Case Caption: | United States Of America Et Al V. Supervalu Inc Et Al |
| Docket Number: | 3:11cv3290 |
| Court: | United States District Court, Illinois Central |
| Order Date: | September 23, 2024 |
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