Two large pharmaceutical companies said Thursday they will appeal a jury verdict ordering them to pay more than $114 million for overcharging the state's Medicaid program for prescription drugs.
GlaxoSmithKline PLC and Novartis AG announced plans to appeal to the Alabama Supreme Court as the state sent letters to 69 other drug companies telling them they had 30 days to settle drug-pricing lawsuits against them.
GlaxoSmithKline attorney Don Jones said the company did not commit fraud, as claimed by the state, and it would appeal its judgment of almost $81 million.
"We think the evidence was clear we reported clear and accurate prices and the state knew what the prices we reported represented," Jones said.
Officials with Novartis said in a news release that they would appeal their "unfounded" $33 million verdict.
The jury returned the judgments Tuesday following a trial of more than two weeks in Montgomery County Circuit Court. It was the second trial of the state's lawsuits against more than 70 drug companies accusing them of causing the Medicaid program to pay too much for prescription drugs.
In the first trial in February, a jury awarded the state $215 million against AstraZeneca PLC. Montgomery County Circuit Judge Charles Price, who presided over both trials, later reduced that verdict to $160 million, which included $120 million in punitive damages.
Jurors did not order any punitive damages against GSK and Novartis.
Montgomery attorney Jere Beasley, who is representing the state in the lawsuits, said Thursday the state could receive as much as $1 billion in compensatory damages if it wins the remaining 69 cases.
"So far the verdicts have been very good to Alabama," Beasley said.
He said Alabama Attorney General Troy King has sent a letter to the remaining companies "offering them a 30-day window to settle or face trial."
Beasley said the state is currently involved in negotiations concerning possible settlements with "four or five" drug companies, but would not say which ones. He believes most of the plaintiffs will eventually agree to settlements.
"They know by now that we know how to try these lawsuits," Beasley said.
Trial of the state's lawsuits against drug companies Bristol-Myers Squibb Co., Novartis subsidiary Sandoz and Abbott Laboratories is scheduled to begin Oct. 27 in Montgomery. Officials with Bristol-Meyer Squibb and Sandoz declined to comment on the attorney general's letter. A spokesman for Abbott could not immediately be reached for comment.
Since the lawsuits were filed, the state has settled its claims against two drug manufacturers, Takeda Pharmaceuticals North America Inc. and Dey LP, for about $7 million.
Skip Tucker, executive director of Alabama Voters Against Lawsuit Abuse, said he thinks the state is trying to get the remaining defendants "to cave in" before appeals of the first two cases are completed. He noted the conservative nature of the Supreme Court, which is composed of eight Republicans and one Democrat.
"I don't think anybody should rush into a settlement before they see what the Supreme Court is going to do," Tucker said.
Members of AARP and Alabama Arise, an advocacy group for the poor, attended Beasley's news conference and said they support the lawsuits.
Joan Carter, executive director of the state AARP chapter, said she hoped any money the state receives could be used to boost Medicaid funding.
"We hope the money can go into expanding home and community-based Medicaid services," Carter said.
GlaxoSmithKline is a London-based health care company with U.S. headquarters in Philadelphia and Research Triangle Park, N.C. Novartis is the U.S. affiliate of a Swiss company with U.S. headquarters in East Hanover, N.J.
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