Alabama Gets $35M From Medicaid Suit Settlements

Wed, 12/24/2008 - 6:03am
By BOB JOHNSON Associated Press Writer MONTGOMERY, Ala. (AP) - Alabama will receive nearly $35 million from settlements of 10 lawsuits accusing prescription drug companies of overcharging the state's Medicaid program. Details of the settlements were revealed Tuesday by Attorney General Troy King. A fourth of the money will go to private attorneys. The law firms of Hand Arendall of Mobile and Beasley Allen of Montgomery will receive a total of about $4.8 million in attorneys fees and $3.9 million for expenses. A total of $10.3 million from the settlements will go into the state's cash-strapped General Fund budget and $4.9 million to the state Medicaid agency. The federal Medicaid program will receive $10.1 million and the Alabama Attorney General's office will get about $750,000. Some of the settlements had been previously announced. King said details with two of the companies were finalized Monday. "This shows my office is not going to sit idly by and let these companies steal from the neediest in Alabama," King said at a news conference Tuesday. The settlements were of some of the more than 70 lawsuits the state filed in 2005 accusing prescription drug companies of committing fraud by causing the state to pay too much for prescription drugs for Medicaid recipients. Companies the state has settled lawsuits with and the amounts include: Roxanne Laboratories/Boehringer Ingelheim, $9.5 million; Bayer Pharmaceuticals, $2 million; Amgen Inc., Immunex, $3.5 million; Bristol-Myers Squibb, $11 million; Ethex Corp./KV Pharmaceuticals, $2 million; and Takeda Pharmaceuticals, $2 million; Dey L.P., $4.75 million. In the case of Roxanne Laboratories/Boehringer Ingelheim and several other companies, the state originally sued two different companies that have since merged. Three of the cases have gone to trial. In February, a Montgomery jury ordered the U.S. subsidiary of British drug maker AstraZeneca to pay the state $215 million. Montgomery County Circuit Judge Charles Price cut the award to $160 million. In a trial in June, a jury ordered GlaxoSmithKline and Novartis to pay the state more than $114 million in damages. Those verdicts have been appealed to the Alabama Supreme Court. King defended the amount being paid to the two law firms, saying the two firms initially agreed to absorb the expenses of investigating the cases until damages were recovered. "The state doesn't have $4 million hanging around to bring these kind of lawsuits," King said. Jere Beasley of Beasley Allen said the amount of the attorney fees is justified. He said the actual fees, not counting expenses, are 14 percent of the amount recovered, which he said is lower than the 33 percent or more attorneys often receive in these types of cases. "The work was overwhelmingly difficult and time consuming. There are few firms that can handle litigation of this magnitude," Beasley said. The lawsuit against Roxanne Laboratories had been scheduled to be tried in Price's Montgomery courtroom beginning Feb. 9. Also scheduled for that day before Price is the trial of the state's lawsuit against Sandoz Inc. King said the state plans to go ahead with the trial of the case against Sandoz.

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