Dateline 11/5/2009 – Download the Medicaid fraud press packet

Beasley Allen founding shareholder Jere L. Beasley speaks out on recent Alabama Supreme Court decision in state Medicaid Fraud lawsuits; asks Court to grant oral argument.

MONTGOMERY, ALA. (November 5, 2009) – The State of Alabama has filed an application for rehearing in the State’s three Medicaid fraud lawsuits that were reversed by the Alabama Supreme Court. All of the State’s lawyers were shocked when the Alabama Supreme Court, in reaching their decision, ignored the trial record in the cases. In fact, it appears from their decision that the majority of the Court failed to even read the record or for some reason saw fit to totally ignore what had actually taken place at the three separate trials. We have asked the Court to grant oral argument on our application to rehear each of the cases.

I would encourage all members of the news media who are interested in finding out what the Court did on the appeals to attend the hearing. That is – in the event we are allowed to present the State’s case in person before the Justices in open court. Most folks are shocked to learn that the Supreme Court refused oral argument in this extremely important litigation.

I also find it most unusual that the defendants’ bad conduct was barely even mentioned by the court in their opinion. To say that the decision reached by the Court is most difficult to understand is a gross understatement. There are several things I would like to point out concerning this litigation:

  • You may recall at the outset of this litigation, the trial judge consolidated a number of the cases to be tried in a single trial. The Alabama Supreme Court, on a Writ of Mandamus, said the cases could not be consolidated since each was to be considered on its own merits. Now on appeal, without notice to the State of Alabama, the same Supreme Court consolidated the three cases into one case.
  • You will find in the Supreme Court’s opinion at least 25 separate instances where 6 of the Justices either ignored or misstated the actual record from the trial of the AstraZeneca case or failed to follow established Alabama law.
  • After an intensive investigation by the federal government, it was reported in 2003 that the drug manufacturers had been committing massive frauds relating to reporting of prices for reimbursement in the Medicaid program. The Office of Inspector General issued guidelines designed to eliminate the fraudulent conduct. If the federal government hadn’t known about the fraudulent activity before 2003, how could individual state Medicaid agencies, which were both underfunded and understaffed, be expected to know that the drug manufacturers were reporting false prices?
  • Committing fraud against the Medicaid program hurts the elderly, the disabled, the young, and the poor as well as every Alabama taxpayer.
  • AstraZeneca – one of the companies on appeal – entered a guilty plea to a charge of criminal fraud in federal court involving state Medicaid reimbursement fraud.
  • AstraZeneca paid a criminal fine of $570 million relating to that criminal guilty plea.
  • AstraZeneca then settled state Medicaid fraud cases involving reimbursement for $355 million.
  • A top official at AstraZeneca prepared an internal pricing document which was a virtual roadmap for how to cheat 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 also supported Alabama’s position and each filed a brief on Alabama’s behalf.
  • Since the Alabama case was tried – and after the AstraZeneca 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, just before the Alabama Supreme Court’s opinion came out, the federal appeals court affirmed the trial court finding AstraZeneca guilty of fraud.
  • The 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 our Alabama cases, returned a verdict against AstraZeneca in the amount of $14.72 million. This verdict came just one day before Alabama’s cases were reversed.
  • On behalf of the State of Alabama – we have settled lawsuits with several drug manufacturers in Alabama – under the very same law – and with the very same facts involved in these 3 cases – for $138 million.

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

We are asking the Supreme Court to reconsider what they have done and we have again asked for oral argument. We want an opportunity to appear before the Court and argue the State’s case in person.

Hopefully, the Court will grant oral argument so that the people of Alabama can find out exactly what has happened to them and how it happened. But more importantly, it will give the Justices an opportunity to read the record and them to correct an injustice.

More Information

Download the Complete Press Packet from today’s press conference.

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