In a turnabout victory for drugmakers, the Alabama Supreme Court has overturned $274 million in jury verdicts. The juries had awarded money to the state, based on accusations that AstraZeneca, Novartis and GlaxoSmithKline had overcharged Medicaid for their drugs. But Alabama's top court essentially said that if the state were overcharged, then it was Alabama's own fault.
In the 8-1 ruling, the justices said state officials could have done its own drug-pricing research, rather than passively relying on the companies' own stated prices to determine how much Medicaid should pay pharmacies for drugs. Alabama's lead trial lawyer said it was "a sad day for the Alabama Medicaid program and all Alabama taxpayers," now that "politically powerful drug companies" were "declared winners by the Alabama Supreme Court." He said he would ask the Supreme Court to reconsider.
The drugmakers, however, said they had been vindicated. "This confirms our position that GSK reported clear and accurate prices, that GSK's pricing practices were consistent with established industry standards and that the state understood full well the pricing benchmarks that GSK reported," GlaxoSmithKline spokeswoman Mary Anne Rhyne told Pharmalot. Novartis and AstraZeneca made similar statements.
Our question is whether the Alabama decision will end up affecting Medicaid-rebate lawsuits in other states. If the states are on the hook for doing their own pricing discovery, then that could get drugmakers off the same hook, seems to us. Let us know what you think.