The Alabama Legislature’s Contract Review Committee on Thursday approved a contract to hire attorneys to represent the state in a massive lawsuit against 73 pharmaceutical companies, charged with causing about $600 million in overcharges to the Alabama Medicaid Agency.
The approval to hire the attorneys came more than two years after the lawyers started working on the lawsuit, which was filed in January 2005.
The committee took the formal action of approving the contract Thursday after questions were raised about whether the contract with the Hand Arendal law firm of Mobile was ever reviewed by the committee, as required by state law.
Hand Arendal has contracted with the Montgomery law firm of Beasley Allen, headed by former Lt. Gov. Jere Beasley, a prominent plaintiff’s attorney, to help pursue the lawsuit.
Attorney General Troy King told the committee Thursday that he appeared before the panel at a 2005 meeting and explained the contract and the lawsuit.
The contract calls for the lawyers to only get paid if damages are awarded to the state and a judge orders the attorney fees to be paid.
The Contract Review Committee did not approve the contract at that 2005 meeting and apparently never took it up for formal review, committee members said. King said he thought the contract had been approved.
Gov. Bob Riley’s administration and King filed the suit, accusing the drug companies of intentionally misreporting the average wholesale price for their drugs, which the Medicaid Agency uses to determine its payments for prescriptions.
Millions at stake
Medicaid officials have estimated the state could have lost hundreds of millions of dollars as a result of the actions by the pharmaceutical companies.
Committee members Rep. John Knight, D-Montgomery, and Sen. Quinton Ross, D-Montgomery, also urged King to consider giving more legal work to black lawyers in the future.
“There are lots of capable black-owned law firms,” Ross said.
King told the committee that he was committed to making sure that his office hires attorneys that “reflect the diversity of the state.”