Alabama Supreme Court Soundly Rejects the State’s AWP Lawsuit Brought Against Three Pharmaceutical Companies

By John R. Fleder –

Numerous states have filed lawsuits across the country alleging that pharmaceutical companies have defrauded the Medicaid system by “publishing” inflated prices, namely “AWP” and “WAC” prices, that do not accurately reflect the prices at which those companies actually sell their products.  The cases generally allege that the states have over-reimbursed pharmacists and others because those states relied on “false” AWP and WAC prices for Medicaid reimbursement purposes.  The defendants have presented numerous arguments to defend these cases. (Hyman, Phelps & McNamara, P.C. is actively involved in that defense.)

On October 16, 2009, the Supreme Court of Alabama dealt a fatal blow to the cases that the State of Alabama commenced against AstraZeneca, GSK, and Novartis. It ruled that the lower court had erred in denying the defendants’ post-trial motions seeking a verdict in their favor.  The appellate court ruled that judgment should have been rendered in favor of the defendants, thus apparently ending the cases in that state against these defendants.  The Court ruled that the State failed to produce evidence that it reasonably relied on the alleged misrepresentations by the defendants with regard to their prices.  There was also a concurring opinion and a dissenting opinion.