The State of Alabama settled another round of Medicaid fraud drug cases last month for a total of $89 million. This puts the total amount for settlements to date at $123,750,000. This latest settlement is a major development in the ongoing litigation against a total of 72 pharmaceutical companies which defrauded the state’s Medicaid system by overcharging for drugs. Our firm, along with the Hand Arndell firm, is representing the State in this litigation. Thus far there have also been jury verdicts of more than $352.4 million against four pharmaceutical manufacturer Defendants. These cases are now on appeal. On May 26th, the Supreme Court denied a motion by Defendants to stay all trials until the pending appeals are heard.
This latest round of settlements settles Alabama’s Medicaid fraud cases against six Defendants comprised of groups of drug manufacturers. These include Abbott Laboratories, Inc.; Aventis Pharmaceutical L.P., Aventis Behring L.L.C., ZLB Behring L.L.C. and Sanofi-Synthelabo, Inc.; TEVA Pharmaceuticals U.S.A., Inc., IVAX Corporation, IVAX Pharmaceuticals Inc., and Barr Laboratories, Inc.; Shering-Plough/Warrick Companies; Forest Laboratories Inc. and Forest Pharmaceuticals Inc.; and Baxter International Inc. and Baxter Healthcare Corporation.
Attorney General Troy King authorized this litigation and suit was filed on behalf of the State of Alabama in 2005 in Montgomery County Circuit Court, alleging massive reporting of false prices to the Medicaid Agency during the period 1991-2005. The pharmaceutical companies misrepresented, misreported and inflated prices for Medicaid drugs. The Attorney General had this to say about the recent settlement:
In January of 2005, I announced that I had taken legal action against these drug companies simply to right a wrong, and to recover public funds that had been illegally taken from our state. My intent was then – and is now – to make Alabama’s taxpayers whole. That is what I have done, and what I will continue to do.
There are still lawsuits pending against 45 remaining Defendants in Alabama. The next trial is scheduled against Watson Pharmaceuticals, Inc., on June 22nd. Another trial involving Mylan Pharmaceuticals, Inc. is set for trial on September 21st.
Twenty-two states besides Alabama currently have pending AWP suits and our firm has been hired to represent seven of these states in their pending AWP Litigation. The real shame of these cases is that by overcharging the Medicaid system, the pharmaceutical companies are hurting those that are the most vulnerable, the weakest. This type of fraud affects the elderly, the poor, children – folks who rely on help from the Medicaid system in order to have access to health care and the medicine they need. These drug companies are lining their own pockets on the backs of these folks. Corporate fraud has become a national problem and it’s largely the result of unregulated greed.
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