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Trial Court awards $38.2 million to the State of Mississippi in Beasley Allen Medicaid fraud lawsuit

MONTGOMERY, ALA. (September 2, 2011) – Today Judge Thomas L. Zebert found in favor of the State of Mississippi in its case against pharmaceutical company Sandoz, Inc. in the Chancery Court of Rankin County, Mississippi, and awarded a total verdict of $38,191,427.00.

The case, Mississippi Medicaid Pharmaceutical Average Wholesale Price Litigation (Master Docket No. 65586-65632, 66312, 66313, 66314) involves allegations that Sandoz caused to be published inflated “Average Wholesale Prices” (AWPs) for the drugs it manufactured, which resulted in the Mississippi Division of Medicaid (DOM) reimbursing pharmacies at an inflated price, all allegedly in violation of the Mississippi Consumer Protection Act, the Mississippi Medicaid Fraud Control act and common law fraud.

Mississippi Attorney General Jim Hood authorized the filing of these lawsuits against the pharmaceutical companies and Beasley Allen attorneys W. Daniel “Dee” Miles, III and Clay Barnett, along with former Mississippi Governor Ronnie Musgrove from Copeland, Cook, Taylor and Bush tried the three-week trial in April.

The Court ruled in favor of the State of Mississippi on the Consumer Protection Act and common law fraud. It awarded Mississippi $23,661,618.00 in compensatory damages; it awarded Mississippi $11,830,809.00 in punitive damages; and it awarded $2,699,000.00 in civil penalties (for 2,699 quarterly reportings, at $1,000.00 each), for a verdict total of $38,191,427.00. In addition, the court entered an injunction on Sandoz using false AWPs when reporting prices to Mississippi.

“This is a huge victory for the State of Mississippi for a number of reasons, but not the least of which is that this is the first of some 54 cases Mississippi has filed against the pharmaceutical manufacturers to go to trial,” Miles said. “Pharmaceutical companies overcharging for drugs to the state’s Medicaid program – a program designed to assist the state’s neediest citizens – is egregious conduct, and the court agreed.”

Also assisting in this case were Beasley Allen attorneys Roman Shaul, Chad Stewart and Alison Douillard.

Read the Sandoz Trial Opinion.

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