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Alabama Attorneys: Watson Cheated The State Out Of $23 Million

Wed, 06/24/2009 - 4:39am
BOB JOHNSON Associated Press Writer MONTGOMERY, Ala. (AP) — Watson Pharmaceuticals cheated Alabama out of $23 million from 1991 to 2005 by inflating prices for prescription drugs provided to poor people through the Medicaid program, an attorney for the state told jurors Tuesday. But an attorney for Watson, James Matthews, said the company "reported true list prices" for all drugs and saved the state "millions of dollars" by providing less-expensive generic drugs. The state is suing Corona, Calif.-based Watson, claiming the company inflated the prices on lists used to determine how much the state should reimburse pharmacists for drugs provided to people on Medicaid. Jere Beasley, the attorney for the state, said Watson was motivated by greed and used "smoke screens" to make the state pay too much for medications for the state's poorest citizens. The opening statements came after attorneys selected a jury of three men and 10 women, including an alternate, for the trial, which is expected to last about two weeks. Watson is one of more than 70 pharmaceutical companies Alabama Attorney General Troy King sued in 2005. Watson manufactures generic and brand name prescription drugs, including the narcotic pain reliever OxyContin and Rapaflo, a medication that relieves men's urinary problems related to an enlarged prostate. At one point during the opening statements, another attorney for Watson, Don Jones, asked Montgomery County Circuit Judge Charles Price to declare a mistrial because Beasley showed jurors a slide that included the name of a drug company the state won a judgment against in a previous trial. Price had ordered attorneys not to tell jurors about the cases against other drug companies. Price turned the motion down and scolded attorneys to "try your case" instead of attacking Beasley, a former Alabama lieutenant governor and a prominent plaintiff's attorney in Montgomery. Besides the $23 million in compensatory damages, Beasley told jurors he expects to also ask them to "punish" Watson by awarding punitive damages. He said those damages could be as much as three times more than the compensatory damages. "Greed was the motivation for what this company did to the state of Alabama," Beasley said. He said the company overstated the prices that it quoted, which Alabama used to reimburse pharmacists for the drugs. "Watson never reported a true and accurate price to the state of Alabama through this entire time," Beasley said. But Matthews told jurors if the company had reported prices any lower, Alabama pharmacists would have lost money in their transactions with Medicaid patients. "It's the money that kept Alabama drug stores in business," Matthews said. "The men and women of Watson didn't lie to the state of Alabama and they haven't cheated the state of Alabama." Last month the state announced it had settled drug pricing lawsuits against six pharmaceutical companies for $89 million. They included lawsuits against Abbott Laboratories of Chicago and Forest Laboratories, with corporate headquarters in New York City. Both were scheduled to be tried with the Watson case this week. The state had previously settled with 10 companies for almost $35 million. Alabama's lawsuits against four companies have gone to trial, with the state winning judgments against each totaling $352.4 million. Those verdicts are being appealed.
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