Alabama Court Clears Way for Trial against Drug Companies

April 21, 2008

The Alabama Supreme Court ruled that more than one pharmaceutical company can be tried at the same time in the state’s lawsuit accusing more than 70 drug companies of fraud in overcharging the state’s Medicaid program.

The April 18 ruling went in favor of the state, which sought to combine some of the cases. The drug companies had asked that each company be tried separately.

Montgomery attorney Jere Beasley, who represents the state in the case, said the ruling clears the way for trial to begin June 16 in Montgomery on a suit against two of the companies, Novartis AG’s pharmaceutical division and SmithKline Beecham Corp.

In the first trial in February, a state court jury awarded the state $215 million in its Medicaid drug pricing fraud case against AstraZeneca Pharmaceuticals LP. Beasley said last week he believes the state’s case against Novartis and SmithKline is stronger than the original case.

“The drug companies wanted to string these trials out one by one over a series of years. This way we can try the cases quicker,” Beasley said.

Attorneys for the drug companies argued that the facts in each case are complex and that it would be confusing for jurors to combine the trials.

A spokeswoman for Novatris, Brandi Robinson, declined to comment because the case involves pending litigation.

Attorney General Troy King called the Supreme Court ruling “good news for the people who depend on Medicaid to provide important medical services.”

“Now we are going to more quickly determine if these companies took advantage of the state,” King said. “Obviously, if we’ve got to have 70-something separate trials it would take a lot longer and be more complicated.”

The Supreme Court in an 8-1 ruling agreed that the cases against the drug companies are complex, but said Novartis and SmithKline could be tried at the same time and any “confusion can be avoided or minimized by careful trial management.”

Justice Glenn Murdock dissented. He said in a separate opinion that he felt there should be separate trials “because of the complexity of the claims and defenses of the parties and the likelihood of substantial confusion on the part of the jury and of prejudice to the defendants.”

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