A federal appeals court has reinstated a lawsuit against Walgreens for allegedly defrauding Virginia's Medicaid program by falsely representing that some patients were eligible for expensive hepatitis C drugs. The decision overturned a previous ruling by a lower court.

In a 3-0 decision, the 4th U.S. Circuit Court of Appeals in Richmond, Va., cleared the way for the nation's largest pharmacy chain to face allegations that it violated the federal False Claims Act and Virginia state law. The case arose from alleged misconduct by Amber Reilly, a clinical pharmacy manager at a Walgreens in Kingsport, Tenn.

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