Document ID: ./input/supremecourt_opinions/opinions/22pdf/21-1326_6jfl.pdf
Page Number: 8.0

Cite as:  598 U. S. ____ (2023) 

5 

Opinion of the Court 

drugs were made at those discounted prices.  And, accord-
ing 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 ac-
tually  respondents’  “usual  and  customary”  prices—and
that,  rather  than  submitting  those  lower  prices  for  reim-
bursement, 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 cus-
tomary”  prices,  and  tried  to  hide  their  discounted  prices
from  regulators  and  contractors.
  Petitioners  have  pre-
sented 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 (inter-
nal  quotation  marks  omitted).    An  executive  at  Safeway