A Circuit Court jury in Montgomery County, Alabama, on February 24th returned a verdict in favor of the State of Alabama against Sandoz, the drug manufacturer. Sandoz was found guilty of defrauding the Alabama Medicaid system. The jury ordered the company to pay $78.4 million, including $28.4 million in compensatory damages and $50 million in punitive damages. The verdict is significant because Sandoz, a subsidiary of Novartis, Inc., manufactures and markets generic drugs. Sandoz is the fourth drug company to go to trial and it was the first generic company.
Our firm is representing the State of Alabama against a total of 72 pharmaceutical companies in the Medicaid fraud litigation. All of the companies reported false prices for Medicaid reimbursement. The fact that a generic drug is cheaper than a brand did not give Sandoz the right to cheat the state out of $28 million.
Sandoz knowingly reported false prices to the state with the belief they would never get caught. In fact, this company – like all too many other corporate entities – actually believes it is above the law.
In the first trial in February 2008, a state court jury awarded Alabama a $215 million verdict against AstraZeneca PLC. The second trial, in July 2008, resulted in a combined $114 million verdict in favor of the state against GlaxoSmithKline and Novartis Pharmaceuticals. Settlements have been reached with seven companies and negotiations are currently ongoing with a number of others. Companies that have settled include Amgen, Inc.; Bayer, Boehringer/Roxane, Bristol-Meyers Squibb Company, Dey, LP; Ethex Corporation and KV Pharmaceutical Company, and Takeda Pharmaceuticals North America, Inc. Twenty-three states, including Alabama, currently have pending Medicaid fraud suits. Our firm has been selected to represent seven other states in their litigation against the drug manufacturers. Dee Miles, Clint Carter, and I from our firm represented the state in this trial.
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