Alabama Supreme Court rules for drug companies

posted on:
October 30, 2009

author:
Jere L. Beasley

category:
Fraud

In a shocking development, the Alabama Supreme Court reversed three of the State of Alabama’s Medicaid fraud lawsuits that were on appeal. The court refused the state’s multiple requests for oral argument in the cases, considered to be among the most important cases to be heard by this Court in recent years. To say the least, that was more than just unusual. The case against AstraZeneca, one of the defendants, had been on appeal for 13 months.

By refusing to allow oral argument, the Court did not allow the members of the news media who had not attended the actual trials that began in 2008 to hear first hand about the bad conduct of these companies. The AstraZeneca case had been pending for so long that even the few members of the news media who attended that trial may have forgotten how strong the State’s case against that defendant really was.

I also find it most unusual that absolutely nothing relating to the defendants’ bad conduct was even mentioned by the court in their opinion. The decision reached by the Alabama Supreme Court is most difficult to understand when you consider that:

  • The federal government did an investigation in 2002 and reported in 2003 that the drug manufacturers had been committing massive frauds in the Medicaid program and issued guidelines designed to eliminate the fraudulent conduct. If the federal government hadn’t known about the fraudulent activity how could individual state Medicaid agencies be expected to know, especially since most have been underfunded and understaffed?
  • Committing fraud against the Medicaid program hurts the elderly, the disabled, the young, and the poor as well as every Alabama taxpayer.
  • The federal government had conducted an investigation and found massive frauds by drug manufacturers in the state Medicaid programs.
  • AstraZeneca – one of the companies – entered a guilty plea to a charge of criminal fraud in federal court involving state Medicaid reimbursement.
  • AstraZeneca paid a criminal fine of $570 million relating to that criminal guilty plea.
  • AstraZeneca settled state Medicaid fraud cases involving reimbursement for $355 million.
  • A top official at AstraZeneca prepared an internal pricing document containing a virtual roadmap for cheating state Medicaid agencies.
  • AstraZeneca as a part of the settlements mentioned above agreed to submit true prices to state Medicaid agencies.
  • AARP – a national group with 500,000 Alabama members – has fully supported Alabama in its lawsuit against the drug companies and in the appeal.
  • 13 state Attorneys General have supported Alabama’s position and each filed a brief on Alabama’s behalf.
  • Since the Alabama case was tried – and after the case was appealed in July 2008 to the Alabama Supreme Court – a Federal Appeals Court heard a separate appeal in a case where AstraZeneca was found guilty in Federal Court of fraudulent conduct in a Medicaid reimbursement case – in a strong opinion and affirmed the trial court.
  • Federal Appeals Court in that case found that AstraZeneca was guilty of extremely bad conduct.
  • A Kentucky jury, after hearing the same evidence we had developed and presented in the Alabama case, delivered a verdict against the drug manufacturer in the amount of $14.72 million. This verdict came one day before Alabama’s cases were reversed.
  • We had settled with several drug manufacturers in Alabama – with the very same law and the very same facts involved – for $138 million.

Taking all of the above into consideration, and knowing the facts of this case, it is extremely difficult to see how the Alabama Supreme court could side with the drug companies and against the citizens of Alabama who are in the Medicaid program and against all Alabamians who pay taxes that support the program. All Alabamians are the losers and politically powerful drug companies declared winners by the Alabama Supreme Court. This is a sad day for the Alabama Medicaid Program and all Alabama taxpayers.

We have asked the Supreme Court to reconsider what they have done. We again requested an opportunity to appear before the Court and argue in person the State’s case. Hopefully, the Court will grant oral argument so that the people of Alabama can find out exactly what has happened to them.

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