As we mentioned in the Capitol Observations section of this issue, our law firm has represented the States of Alabama, Mississippi, Louisiana, Kansas, Utah, South Carolina, Hawaii and Alaska in their AWP (Average Wholesale Price) Litigation over the past several years. Fortunately, we have successfully tried a number of these cases and are now are settling cases with a number of the companies in those eight states. We were pleased to announce that our firm has recently obtained over $100 million in settlements over the past several months in this litigation. We are in the process of finalizing those settlements.

To date, we have settled cases amounting to a total of $450 million in the AWP litigation for the eight states we currently represent. We still have over $116 million worth of judgments either on appeal or pending in the post-trial motion stage of the litigation in two states.

These recent settlements vary in amounts depending upon the states usage of a particular company’s drugs in the Medicaid program. These settlements involve some 16 companies, but claims for the states are negotiated separately. No settlement is dependent on what happens in any other state.

Our firm views the representation of the Attorneys General in each of these eight states as a great honor and privilege. It also carries with it a tremendous responsibility to make sure that each state is adequately compensated by the companies which falsely reporting prices to the states’ Medicaid programs. This litigation has been tremendous public service for the citizens of each of the states we have represented. We will continue to work to see that justice is done in each state for the wrongdoing by the pharmaceutical companies to the states’ Medicaid programs. This litigation has been extremely complicated and very expensive. The drug companies have access to the very best legal talent as well as a group of experts who have been paid millions to defend the companies.

In addition to the pharmaceutical companies reporting of false prices to the Medicaid programs, our firm has also initiated litigation against a pharmaceutical wholesaler, McKesson, which the states have alleged increased prices an additional 5% on some 1,900 different types of drugs during a certain time period. This was going on during the same time that the pharmaceutical companies were reporting false prices. We now have cases pending against McKesson in the States of Kansas, Louisiana, Alaska and Hawaii.

All of these Medicaid programs were severely taken advantage of in terms of the prices being reported by the pharmaceutical industry and some wholesalers during the period of time from 1991 through 2010. These cases are just one example of why healthcare costs are spiraling out of control in the country. We believe this litigation has been a huge step in the right direction in the fight to curb the abuse of inflated costs that we must all pay for in the healthcare industry.

A number of lawyers from our firm have been actively involved in this litigation. They include Dee Miles, Roman Shaul, Clay Barnett, Chad Stewart and Alison Douillard. They have done an outstanding job in this massive and most difficult litigation. Our support staff also has done a tremendous job in the handling of these cases. The drug manufacturers have been tough opponents in this litigation. They are powerful politically and have used their connections to full advantage in several of the states. In fact, the companies – through what I consider to have been political pressure – were able to keep at least one state from filing suit. That cost the taxpayers of the state several hundred million dollars. The drug companies also have access to, and can afford, the very best legal talent. They also can call on highly-paid experts to assist them in defending the AWP cases. We will keep our readers posted on any new developments that occur with this litigation, including verdicts, settlements or appellate actions.