Drug companies have their day in Ala. SC, King now 0-5

John O'Brien Oct. 16, 2009, 3:43pm


MONTGOMERY, Ala. (Legal Newsline) - A day after being dealt a $14.7 million verdict against it in Kentucky, pharmaceutical giant AstraZeneca received some really good news in Alabama.

The Alabama Supreme Court overturned a $160 million verdict against AstraZeneca Friday just weeks after state Attorney General Troy King urged the Court to make a decision.

King alleged more than 70 companies have been ripping off the state's Medicaid program by overcharging for their prescription drugs. Of the five suits that went to trial, two were initially unsuccessful.

"The State determined for itself the appropriate reimbursement formulas, based on its own surveys and calculations," Associate Justice Thomas Woodall wrote for the majority, according to a Bloomberg report.

"It cannot, therefore, claim reliance on upon the alleged misrepresentation."

King hired private lawyers to pursue the cases. The Supreme Court also overturned a $33 million verdict against Novartis Pharmaceutical and an $80.9 million verdict against GlaxoSmithKline Friday.

The AstraZeneca verdict was originally $215 million but was reduced. Only $40 million was classified as compensatory damages.

A Montgomery law firm led by attorney Jere Beasley and Hand Arendall, which has five offices in the state, represented the State. They stood to earn 14 percent of the awards and have not contributed to King's campaigns.

Beasley called the decision "difficult to understand."

"In refusing to allow oral argument, the Court did not allow members of the news media who had not attended the trial in 2008 to hear first hand how bad the conduct of these companies was," he said.

"The AstraZeneca case had been pending for so long that even the few members of the news media who attended the trial against AstraZeneca may have forgotten how strong the State's case really was."

He also said he would ask the Court to reconsider its decisions.

King had criticized the amount of time it took the Court to reach a conclusion.

"It has now been more than 18 months since the first verdict," King wrote.

"And still the Alabama Supreme Court has not ruled on these cases. I call on the court to do so. I have done my part and sent the message -- Alabama is a very bad place to come and steal. All of Alabama now watches and waits to see if the court will allow that message to be received and our people protected."

Alabama Voters Against Lawsuit Abuse executive director Skip Tucker said King shouldn't be pressuring the Court, on which Republicans hold an 8-1 majority. Three of the seats are up for election next year.

"(King is) putting undue pressure on his fellow conservatives and GOP members," Tucker said.

"King, with three justice seats coming open in 2010, is knowably putting political pressure to cave into trial lawyers, even though they only have a 60-percent success rate.

"And what it does, if the Supreme Court affirms these high-dollar verdicts, once the Supreme Court reaches a decision on this thing the settlements will start. Depending on the Supreme Court decisions, millions upon millions upon millions of dollars are at stake. If they affirm high-dollar awards, the settlements are going to be high-dollar."

Kentucky Attorney General Jack Conway's suit against AstraZeneca made the same allegations.

In June, General Conway announced a $16 million verdict against Sandoz, the generic-drugs division of pharmaceutical giant Novartis, for inflating the prices of its prescription drugs. He has also settled cases with Amgen for $2.4 million, Immunex for $145,000, Bristol-Meyers Squibb for $10 million and Baxter Healthcare Corporation for $2 million.

AVALA says the State has received nearly $100 million from the cases so far. Of that, $56.7 million have gone to the general fund, $26 million have gone to the attorneys and $17 million is in an escrow account.

King has filed a lawsuit against the federal Centers for Medicare and Medicaid Services regarding the amount of money the federal government can claim from Medicaid recovery lawsuits.

From Legal Newsline: Reach John O'Brien by e-mail at jobrienwv@gmail.com.

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