Healthy Skepticism Library item: 15677

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Publication type: news

Johnson B.
Ala. settles suits with 6 drug firms for $89M
Yahoo Finance 2009 May 22
http://www.breitbart.com/article.php?id=D98BE3QO1&show_article=1

Full text:

Six pharmaceutical companies have settled Medicaid drug pricing lawsuits with the state of Alabama for $89 million, the latest in a string of drug fraud cases resulting in a financial boon to the state.

Attorney General Troy King announced Friday that the settlements were reached with Abbott Laboratories of Chicago; Aventis Pharmaceutical L.P., of Bridgewater, N.J.; TEVA Pharmaceuticals USA, of North Wales, Pa.; Schering-Plough/Warrick Companies, with global headquarters in Kenilworth, N.J.; Forest Laboratories, with corporate headquarters in New York City; and Baxter International, of Deerfield, Ill.

King did not say how much each company agreed to pay. Part of the agreement was that the state would not release the individual amounts.

The companies were among the more than 70 that King sued in 2005, charging them with manipulating the price that the state’s Medicaid program pays for prescription drugs.

The state had previously settled with 10 companies for almost $35 million. The state’s lawsuits against four companies have gone to trial, with the state winning judgments against each totaling $352.4 million. Those verdicts are being appealed.

King said Friday the bulk of the money from the latest settlement will go into the state’s cash-strapped General Fund Budget. That’s the budget that funds Medicaid, state troopers, prisons and other non-education state services.

The state has been represented in the litigation by the law firms of Hand Arendall of Mobile and Beasley Allen of Montgomery, which will receive about 14 percent in legal fees plus expenses from the settlement. King said it has not been determined exactly how the settlement will be distributed.

King said the purpose of the lawsuits was to “recover public funds that had been taken illegally from our state.”

Jere Beasley, the lead attorney for the state in the cases that have gone to trial, said Friday that the settlements show the state’s cases against the companies are well-founded.

“No group would pay $89 million if they had any idea we had been wrong in bringing the lawsuit,” Beasley said.

Officials with Abbott Laboratories and Baxter International did not immediately return a call for comment Friday.

Trial of the state’s lawsuits against Abbott and Forest had been scheduled to begin June 22. Trial of a lawsuit against Watson Pharmaceuticals is still expected to begin on that date in Montgomery County Circuit Court.