$89 million settlement reached in Alabama Medicaid fraud case

posted on:
May 22, 2009

author:
Wendi Lewis

category:
Fraud

Today Alabama’s Attorney General Troy King announced an additional $89 million in settlements in ongoing litigation against a total of 72 pharmaceutical companies accused of defrauding the state’s Medicaid system by overcharging for drugs. Beasley Allen is representing the state in the Average Wholesale Price (AWP) litigation, and has already secured settlements totaling $34.75 million and jury verdicts of more than $352.4 million against pharmaceutical company defendants.

The latest round of settlements resolves Alabama’s AWP cases against six defendants comprised of groups of drug manufacturers, including 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.

Settlements so far total $123,250,000. Atty. Gen. King already has recovered $34,750,000 of that total for the state. The AWP litigation was filed on behalf of the State of Alabama in 2005 in Montgomery Circuit Court, and alleges massive overcharging of the Medicaid Agency during the period 1991-2005 as a result of pharmaceutical companies misrepresenting, misreporting and inflating prices for drugs.

Twenty-two other states currently have pending AWP suits and Beasley Allen has been tapped to represent 7 other states in their pending AWP Litigation.

“The real shame of this case is that by overcharging the Medicaid system, what the pharmaceutical companies are doing is hurting those that are the most vulnerable, the weakest,” said Beasley Allen founding shareholder Jere L. Beasley. “This type of fraud affects the elderly, the poor, children – people who rely on help from the Medicaid system in order to have access to health care and medicine they need. These drug companies are lining their own pockets on the backs of these people, and they are also taking money from the taxpayer’s pocket – that’s you and me.”

There are suits pending against 45 remaining defendants in Alabama, with the next trial scheduled against defendant Watson Pharmaceuticals, Inc., on June 22. Mylan Pharmaceuticals, Inc., is set for trial September 21.

“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,” said Attorney General King. “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. Instead, I made a pledge to place Alabama’s interest first and to do the right thing no matter the political cost for doing so. These suits were not then – and will never be – about taking legal action to generate money to run state government. That would be an abuse of the legal system. Still, four years later, there are things occurring in our state that cannot be ignored . . . Today, Alabama finds itself in dire financial condition. Alabama’s economy is in its worst condition since Governor Guy Hunt was in his first term, and economic experts predict that it may get much worse before it gets better. As we deposit these monies back into the General Fund, it is my hope that they can be used to offset some of the massive budget shortfalls within the Alabama Department of Corrections, and, perhaps, even be used to provide relief to those Alabama families who acted in good faith, saving and investing in the Alabama Prepaid College Tuition program.”

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