LEGAL NEWSLINE

MADISON, Wis. (Legal Newsline) - A forfeiture award of $4,578,000 has been levied against a pharmaceutical company for misrepresentations that defrauded the Wisconsin Medicaid program.

Dane County Judge Richard Niess issued the forfeiture award, imposing a $1,000 forfeiture award for each of the 4,578 misrepresentations he found Pharmacia, a subsidiary of Pfizer, to have made or caused to be made.

The order follows a February trial that saw damages totaling $9 million handed out by a jury against Pharmacia for fraudulent pricing violations.

The jury in the February trial had originally found 1.44 million violations of the state's Medicaid fraud laws over the period of a decade. The State Justice Department's attorney then demanded approximately $212 million in forfeitures, a number that Judge Niess said was a gross overcalculation of the number of violations, finding instead a total of 4,578 misrepresentations.

Niess, in declining to find for the maximum allowable forfeiture, stated a fear of Pharmacia passing the fine along to consumers in higher prices.

A permanent injunction against Pharmacia was also issued by Judge Niess that requires the company to follow Wisconsin law and, "not make or cause to be made any false statement of a material fact for use by the Wisconsin Medicaid Program in determining rights to a payment."

Arguing before Judge Niess at a May hearing for the state's forfeiture request, Attorney General J.B. Van Hollen noted three complementary remedies of significance in the law enforcement of the action.

"First, the jury determined the amount necessary to make the Medicaid program whole," Van Hollen said. "Second, the court ordered a substantial penalty to punish Pharmacia and deter others from engaging in this fraudulent pricing scheme. Third, the court has issued an injunction so that Pharmacia must obey the law under penalty of contempt. By any measure, it's a resounding affirmation of our contention that the fix is simple: tell the truth."

Thirty-six pharmaceutical defendants have faced action from the state of Wisconsin, alleging violations of the state's Medicaid fraud laws. Pharmacia was the first of the defendants to contest the state's allegations at trial.

Prior to the Pharmacia trial, Amgen, Immunex and Baxter Healthcare settled. More trials are scheduled for March through May of 2010 for the 32 remaining defendants in the litigation.