Drug companies land in the hot seat

By By Bob Martin, The Alabama Scene
Next Monday, the state of Alabama will begin its second trial in the “Average Wholesale Price” litigation against major drug companies. The state contends defendants GlaxoSmithKline and Novartis Pharmaceuticals, Inc. falsely inflated the prices they reported to the Alabama Medicaid Agency, which used those prices to reimburse pharmacists for Medicaid recipient prescriptions. This is the first case where two defendants will be tried together since the Alabama Supreme Court ruled that the state could consolidate two defendants for a single trial based on the same or similar allegations.
The first case the state took to trial was against AstraZeneca last February which resulted in a $215 million verdict for the taxpayers of Alabama. The post verdict hearing in that case is set for Monday morning June 9 in Montgomery before Circuit Judge Charles Price. The defendant is asking the judge to reduce the verdict to $160 million under the tort reform act. It is also raising other grounds. One of them is that the state isn’t entitled to the prejudgment interest.
In the case against GSK &Novartis Pharmaceuticals, the state is asking compensatory damages of $70 million and $30 million. “We will also ask for punitive damages against both,” according to Montgomery lawyer Jere Beasley, who represents the state. “As in the first trial the fraud allegation will be the same… reporting false prices to the Medicaid Agency from 1991 through 2005,” Beasley said. Both defendants have been sued by other states for the same fraud. GSK settled a civil case with Massachusetts involving two of the drugs involved in the upcoming Alabama case.
There are 71 remaining defendants, two of which will go to trial on June 16, leaving 68 remaining defendants after the June trial begins. The trial is expected to last approximately two weeks.
Justice investigating Siegelman case, three others
The counsel for the Justice Department’s Office of Professional Responsibility (OPR) has told Congress that the OPR has pending investigations into the allegations of selective prosecution against former Gov. Don Siegelman and three other Democratic officials.
The other cases involve Wisconsin procurement officer Georgia Thompson, Allegheny County, Penn. Coroner Dr. Cyril Weicht, and Mississippi Supreme Court Justice Oliver Diaz and Mississippi attorney Paul Minor.
The House Judiciary Committee, conducting its own investigation, requested the Justice Department to investigate these matters, along with the firing of eight U. S. Attorneys. The communication was sent to the House Committee in a letter dated May 5.
The Judiciary Committee staff pointed out in its communication to Justice that studies have shown that 80 percent of public corruption cases, initiated during the administration of President Bush, have targeted Democratic office holders, while only 14 percent have targeted Republicans.
The studies show that there is less than one chance in 10,000 that this occurred by chance, the committee staff wrote to the Department of Justice.
This communication from OPR to the House Committee means that a top-to-down probe will be initiated into the U. S. Attorney’s office in the Middle District of Alabama and U. S. Attorney Leura Canary. The legs on the Siegelman controversy continue to grow.