After much back and forth and two days of deliberations in a seemingly endless Medicaid fraud lawsuit, an Alabama state court jury has ordered GlaxoSmithKline and Novartis to shell out some big bucks. The State originally accused the companies of overcharging Medicaid patients for prescription drugs from the early 1990s to the mid-2000s. The court order is for GSK to pay $80.8 million in damages and Novartis to pay $33.7 million.
The companies charged the state Medicaid program a higher price than they offered to other organizations, according to the state, represented by attorney for the state Jere Beasley. This is the second of the state's lawsuits to go to trial since it filed 73 suits against various drug makers in 2005, including one suit against AstraZeneca that the courts recently reduced to $160 million, including $120 million in punitive damages.
Attorneys for both companies continued to deny all allegations of fraud, stating that they followed the necessary procedures for pricing and reporting. Novartis announced shortly after the verdict that it would appeal, stating that the State's claims were baseless.
The payments due are for compensatory damages with interest. The jury did not order payment of any punitive damages.