Jury Awards Alabama $215M In Lawsuit That Claimed AstraZeneca Overcharged Medicaid

Main Category: Medicare / Medicaid / SCHIP
Also Included In: Pharma Industry / Biotech Industry;  Litigation / Medical Malpractice
Article Date: 25 Feb 2008 - 7:00 PDT

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An Alabama state court jury has decided that AstraZeneca must pay the state $215 million after finding that the company charged the state's Medicaid program inflated prescription drug prices, Bloomberg/Philadelphia Inquirer reports. The Montgomery County Circuit Court jury in Montgomery, Ala., found AstraZeneca liable for misrepresentation and fraudulent concealment. The award includes $40 million in compensatory damages and $175 million in punitive damages (Bloomberg/Philadelphia Inquirer, 2/22).

Alabama Attorney General Troy King (R) in 2005 filed lawsuits against more than 70 pharmaceutical companies over Medicaid drug prices. The AstraZeneca case was the first to go to trial. The state has settled cases with Takeda Pharmaceuticals North America and DEY. Drug makers are required by federal law to give Medicaid the best price for drugs they offer to any customer. Montgomery attorney Jere Beasley, who represented the state, told the jury that AstraZeneca did not provide Alabama with "honest and accurate" prices for its drugs.

AstraZeneca says it obtained for the state the best prices it could (AP/Wall Street Journal, 2/22). In a statement, the company said, "AstraZeneca believes this lawsuit is legally and factually unfounded, and we intend to appeal to the Alabama Supreme Court if the trial court does not reject the jury's verdict" in a post-trial order (Bloomberg/Philadelphia Inquirer, 2/22). Tom Christian, a lawyer who represented AstraZeneca, said the prices the company charged the state were barely enough for pharmacists to stay in business. According to Christian, a large judgment that requires the company to lower prices would make it financially impossible for pharmacists to fill prescriptions for Medicaid beneficiaries (AP/Wall Street Journal, 2/22).

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