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Alabama court rejects $274 million verdicts in drug cases

October 19, 2009
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According to the Associated Press, the Alabama Supreme Court threw out jury decisions awarding the state more than $274 million from three pharmaceutical companies, ruling they did not defraud the state in pricing prescription drugs for poor and elderly citizens. The court overturned jury verdicts against the drug companies AstraZeneca, Novartis and GlaxoSmithKline, accused by the state of fraudulently manipulating prices of drugs for Medicaid recipients. The court ruled 8-1 that the state did not have to rely on the drug companies'' information in deciding what prices to pay pharmacists for prescription drugs for Medicaid recipients. The justices said state officials could have done their own research and determined the correct price. The decision is a blow to the state''s cash-strapped General Fund budget, which funds Medicaid and other non-education state agencies and is facing budget cuts because of the recession. If the verdicts had been allowed to stand, much of the money from the verdicts would have gone into the General Fund. More than 70 lawsuits were filed in 2005 by the state against drug companies. The state has settled its lawsuits against 16 of the drug manufacturers for more than $124 million.
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