Healthy Skepticism Library item: 13978
Warning: This library includes all items relevant to health product marketing that we are aware of regardless of quality. Often we do not agree with all or part of the contents.
Publication type: news
Gambacurta B.
Jere Beasley aims at billion-plus in settlements with drug makers
The Montgomery Independent (Montgomery, Alabama, USA) 2008 Jul 15
http://www.al.com/news/independent/index.ssf?/base/news/1216149304258360.xml&coll=4
Full text:
Having won multi-million-dollar awards against three large drug manufacturers, the state of Alabama is now offering 67 other pharmaceutical companies the opportunity to settle out of court and save the companies millions of dollars. At the same time, the state could add more than $1 billion to its bottom line and markedly improve funding for Medicaid which serves the poor, the elderly, children and the disabled in Alabama.
Lead attorney Jere Beasley of Montgomery says that Attorney General Troy King has sent letters to the remaining drug companies, giving them 30 days to settle all claims or face trial in Montgomery County Circuit Court. “After 30 days, we ain’t going to negotiate with any of them,” Beasley said.
The state initially filed suit against 72 pharmaceutical companies, alleging they had fraudulently overcharged the state Medicaid Agency more than $1 billion. The first case went to trial in Montgomery in February and a jury awarded the state $215 million against AstraZeneca PLC. Judge Charles Price later reduced the verdict to $160 million: $40 million in compensatory damages and $120 million in punitive damages.
The second trial ended last Tuesday with another $114 million verdict in favor of the state. The jury awarded Alabama $81 million against GlaxoSmithKline PLC and $33 million against Novartis AG. Both awards were for compensatory damages. No punitive damages were awarded.
Two smaller drug companies, Takeda Pharmaceuticals North America Inc. and Dey LP settled before trial for about $7 million. Trials are pending against the remaining 67 companies.
“We’re going to give them a chance to settle and cut their litigation costs,” Beasley said. He noted that the costs of defending themselves were astronomical. He said one defendant had paid-out $12 million for one expert witness from 2005 until today.
“It will be good for the state to settle, so the bottom line to the state is as close to full recovery as possible,” Beasley said. He said settlement talks are already underway with four or five companies, but he declined to name them. “The settlements made have not slowed these companies down one bit,” he said.
“If we could settle them all today, we would accept the amount they cheated Alabama out of, plus interest (of 6 percent), plus 10 to 15 percent penalty.” Beasley estimated total damages to the state of $1 billion. If all claims are settled out of court, Alabama could realize between $1.16 billion and $1.21 billion, less expenses and legal fees. Beasley said he and the other lawyers hired by the state would receive 14 percent of the net recovery.
“I’d be willing to cut my fee to settle these cases,” Beasley said. A number of states have hired Beasley’s firm to represent them in their claims against drug manufacturers. In addition to Alabama, Beasley said he’s representing Alaska, Hawaii, Mississippi, South Carolina and Utah and talks are underway with five or six other states. He said 23 states have filed suits against the defendants. Alabama is the first to go to trial.
Beasley said if the drug companies choose to go to trial, they could face more than $1 billion in compensatory damages plus, using a 3-to-1 ratio, another $3 billion in punitive damages. The next trial is scheduled for October 27 in Montgomery against Bristol-Myers Squibb Co., Sandoz Inc. a Novartis subsidiary, and Abbott Laboratories Inc.
