Judge Thomas L. Zebert found in favor of the State of Mississippi in its lawsuit against pharmaceutical company Sandoz, Inc. in the Chancery Court of Rankin County, Miss., and awarded $38,191,427.00 in damages. The case, referred to as Mississippi Medicaid Pharmaceutical Average Wholesale Price Litigation involves allegations that Sandoz caused to be published inflated “Average Wholesale Prices” for the drugs manufactured by Sandoz, which resulted in the Mississippi Division of Medicaid reimbursing pharmacies at an inflated price, in violation of the Mississippi Consumer Protection Act; and the Mississippi Medicaid Fraud Control Act. Common law fraud was also alleged.
Mississippi Attorney General Jim Hood authorized the filing of these lawsuits against the pharmaceutical companies. Dee Miles and Clay Barnett, lawyers in our firm, along with former Mississippi Governor Ronnie Musgrove from Copeland, Cook, Taylor and Bush, located in Jackson, tried the case for three weeks in April. At the conclusion of the trial, Judge Zebert took the case under advisement and he now has made his ruling.
Judge Zebert ruled in favor of the State of Mississippi on the Consumer Protection Act and common law fraud claims. Mississippi was awarded $23,661,618.00 in compensatory damages and $11,830,809.00 in punitive damages. The judge also awarded $2,699,000.00 in civil penalties, for a total judgment of $38,191,427.00. In addition, Judge Zebert entered an injunction against Sandoz prohibiting the company from using false AWPs when reporting drug prices to Mississippi, which is very important.
This is a huge victory for the State of Mississippi for a number of reasons, not the least of which is, this is the first of some 54 cases Mississippi has filed against the pharmaceutical manufacturers to go to trial. A win for the State in the first case is huge. Pharmaceutical companies overcharging for drugs to the state’s Medicaid program – a program designed to assist the State’s neediest citizens – is egregious conduct. We had reached settlements previously with several other drug companies which made this trial, in effect, a benchmark trial. Also assisting in the preparation and trial of the case were Roman Shaul, Chad Stewart and Alison Douillard, all lawyers from our firm.
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