Processing Magazine

Alabama settles suits against five drug companies

October 13, 2008

The state of Alabama has settled Medicaid drug pricing lawsuits it filed against prescription drug manufacturer Bristol-Myers Squibb and four other companies, according to the Associated Press. Bristol-Myers Squibb is one of more than 70 companies the state has sued for allegedly overcharging the state''s Medicaid program. Earlier this year, state juries returned multimillion-dollar verdicts against three of the pharmaceutical companies. Alabama Attorney General Troy King sued the drug companies in 2005 over drug prices for Medicaid recipients. Agreements also were reached with four other unnamed companies. The amount of the settlements was not immediately released. The state''s lawsuit against Bristol-Myers Squibb had been scheduled to be tried beginning October 27 in Montgomery County Circuit Court. The settlements were reached after the first trials led to jury verdicts in favor of the state. A jury in February ordered the U.S. subsidiary of U.K. drugmaker AstraZeneca, to pay the state $215 million -- $40 million in compensatory damages and $175 million in punitive damages. But on appeal the amount of the damages was cut to $160 million. In July, another jury found in favor of the state in lawsuits against the drug companies GlaxoSmithKline and Novartis. The jury found GSK liable for nearly $81 million in compensatory damages and found Novartis owed the state about $33 million in similar damages. No punitive damages were awarded. AstraZeneca, GlaxoSmithKline and Novartis have all appealed their cases to the Alabama Supreme Court. Before those trials, the state settled lawsuits against drug manufacturers Takeda Pharmaceuticals North America Inc. for $2 million and against Dey LP for $4.75 million.