Ala. court reverses drug price cases

MONTGOMERY, Ala. (AP) - The Alabama Supreme Court has thrown out jury decisions awarding the state more than $274 million from three pharmaceutical companies.

The court on Friday overturned verdicts against the drugmakers AstraZeneca PLC, Novartis AG and GlaxoSmithKline PLC.

The state had accused the drug companies of manipulating prices and causing Alabama's Medicaid program to pay too much for prescription drugs for Medicaid recipients. The court ruled 8-1 to overturn the verdicts.

More than 70 lawsuits were filed in 2005 by the state against drug companies. The state has settled its lawsuits against 16 of the drug manufacturers for more than $124 million.

(Copyright 2009 by The Associated Press. All Rights Reserved.)


Beasley-Allen Law Firm, the state's legal representative, responds:

The Alabama Supreme Court refused the State of Alabama's request for oral argument in three of the most important cases to be heard by this Court in recent years. This case against AstraZeneca had been on appeal for 13 months. 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.  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.  The opinion of the Alabama Supreme Court is most difficult to understand when you consider that:

  • Committing fraud against the Medicaid program hurts the elderly, the disabled, the young, and the poor as well as every Alabama taxpayer;
  • AstraZeneca - one of the companies - entered a guilty plea to a charge of criminal fraud in federal court involving state Medicaid reimbursement;
  • AstraZeneca paid a criminal fine of $570 Million relating to that criminal guilty plea;
  • AstraZeneca settled state Medicaid fraud cases involving reimbursement for $355 Million;
  • A top official at AstraZeneca prepared an internal pricing document containing a virtual roadmap for cheating state Medicaid agencies;
  • AstraZeneca as a part of the settlements mentioned above - agreed to submit true prices to state Medicaid agencies;
  • AARP - a national group with 500,000 Alabama members - has fully supported Alabama in its lawsuit against the drug companies and in the appeal;
  • 13 state Attorneys General have supported Alabama's position and each filed a brief on Alabama's behalf;
  • Since the Alabama case was tried - and after the case was appealed in July 2008 to the Alabama Supreme Court - a Federal Appeals Court heard a separate appeal in a case where AstraZeneca was found guilty in Federal Court of fraudulent conduct in a Medicaid reimbursement case - in a strong opinion and affirmed the trial court;
  • The Federal Appeals Court found that AstraZeneca was guilty of extremely bad conduct;
  • Yesterday, a Kentucky jury, after hearing the same evidence Alabama lawyers developed and presented in the Alabama case, delivered a verdict against the drug manufacturer in the amount of $14.72 million; and

Taking all of the above into consideration, and knowing the facts of this case, it is extremely difficult to see how the Alabama Supreme Court could side with the drug companies and against the citizens of Alabama who are in the Medicaid program and against all Alabamians who pay taxes that support the Medicaid program.  These folks are the losers today and politically powerful drug companies declared winners by the Alabama Supreme Court.  This is a sad day for the Alabama Medicaid Program and all Alabama taxpayers.

We will ask the Court to reconsider what they have done.  We will also again request an opportunity to appear before the Court and argue the State's case.  Hopefully, the Court will grant oral argument to the State so that the people of Alabama can find out exactly what has happened to them.


Alabama Attorney General Troy King responded to the ruling saying he was disappointed. King went on to say he respects the court's authority to have the final word.

The decision was 8-1 with only Justice Tom Parker issuing a descent in the matter.

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