Perhaps, it is a good time to do an overview of the Medicaid fraud litigation, which has been referred to as the AWP (Average Wholesale Price) litigation. This litigation continues to flourish, not only in Alabama, but all over the nation. Alabama has been blessed with four separate jury verdicts over the past year and a half in this ongoing litigation. The jury verdicts in Alabama were:
• AstraZeneca – $250 Million reduced by the trial court to $160 Million;
• GlaxoSmithKline – $81 Million;
• Novartis – $33 Million; and
• Sandoz – $78.4 Million.
Alabama’s next trial will be against Watson Pharmaceuticals and the Mylan Companies, both of which had to be rescheduled for trial sometime this Fall. A scheduling conference was held before Judge Charles Price for those Defendants on July 28th. Watson will be tried on December 7, 2009 and Mylan on January 22, 2010. Next April, Alabama is already scheduled to try four brand pharmaceutical companies: Johnson & Johnson, Wyeth, Merck and Hoffman LaRoche. To date, no jury in Alabama has returned a verdict for the pharmaceutical industry in the Medicaid fraud litigation.
In other states, Kentucky recently won a $16 Million verdict against Sandoz, Inc., and in Wisconsin, a jury returned a $9 Million verdict for the State. In both of those trials, the jury found that punitive damages must be imposed in the form of civil penalties. The procedure in those states is that the Court must impose those penalties as prescribed by the State’s penalty statutes. In Wisconsin, the penalty statute mandates a fine for each fraudulent price reported of not less than $100, and not more than $15,000. In Kentucky, the law states that the court may award up to $2,000 as a penalty for each fraudulent price reported. The Wisconsin jury found 1,440,000 separate fraudulent prices reported and the Kentucky jury found 2,900 violations of the same type of fraudulent price reporting. Neither of the judges in those cases has ruled on the penalties as of the date of this report, but stay tuned.
The State of Hawaii will have its first Medicaid fraud case trial on October 21, 2009 in Honolulu, Hawaii, against the Watson Defendants. There will be two more trials in November against Sandoz and in January against two Defendants, GlaxoSmithKline and Novartis. Our firm will be trying these cases along with the Miner, Barnhill firm out of Chicago and a local firm, Price Okamoto, located in Honolulu, Hawaii. We look forward to trying these cases with our co-counsel and the Hawaii Attorney General Mark J. Bennett.
There are also trials set in the state of Kentucky against AstraZeneca on September 21, 2009, and in the State of Wisconsin in January against Johnson & Johnson. Trial settings have also been set against various Defendants in the States of Mississippi, Kansas, Utah, Texas, and Alaska. In addition, the Federal Government’s cases against the pharmaceutical industry continue to develop with two recent settlements being announced by the Department of Justice against Schering-Plough/Warrick and Aventis/Sanofi.
As mentioned above, Alabama has settled with fifteen companies for $124.5 million, the most of any of the litigating states, and we are currently engaged in settlement talks with several other companies. Our firm is also engaged in settlement discussions with Defendants here and in some of the other states that we represent (Mississippi, South Carolina, Hawaii, Alaska, Kansas and Utah). It appears the industry is beginning to come to terms with the fact that it has been caught committing its fraudulent pricing scheme on the State and Federal Medicaid programs and it’s time to pay for their intentional wrongdoing.
This litigation is extremely important to the citizens of this country because it is just one of many examples of how corruption and greed are not only destroying this country’s health care system, but the financial stability of our economy. An untold number of this country’s citizens were forced to do without proper healthcare because of the billions of dollars that the pharmaceutical industry literally stole from the State and Federal Medicaid programs as a result of this fraudulent pricing scheme.
It’s good to see that our judicial system is at work rectifying this egregious corporate fraud committed in our country. When you consider that Medicaid programs are designed to benefit the poor, the disabled, the young and the elderly citizens, it makes this corporate boardroom fraud even worse. As a law firm, we are proud to be a part of these important cases.
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