Jury orders AstraZeneca to pay Alabama $215 million in Medicaid fraud suit

A state court jury awarded Alabama $215 million Thursday in its Medicaid drug price fraud suit against AstraZeneca Pharmaceuticals LP.

The circuit court jury said the subsidiary of Britain's AstraZeneca PLC must pay $40 million in compensatory damages and $175 million in punitive damages.

"A grave misjustice has been righted," Alabama Attorney General Troy King said after hearing the verdict.

Judge Charles Price indicated he would go along with the jury's judgment.

A spokesman for AstraZeneca said the company would appeal to the Alabama Supreme Court.

The state claimed the company made Alabama's Medicaid system pay too much for drugs prescribed to its patients by inflating prices over a 15-year period. AstraZeneca said it got the state the best price it could.

AstraZeneca is one of more than 70 drugmakers King sued in 2005 over drug prices for Medicaid recipients. The state settled cases with two other companies, Takeda Pharmaceuticals North America Inc. and Day LP, and the suit against AstraZeneca was the first to go to trial.

AstraZeneca makes drugs including Nexium, which is used to treat heartburn and acid reflux, and Crestor, which is prescribed to lower cholesterol.

"This company took unfair advantage of the Alabama Medicaid Agency and of those in this state who depend upon that agency's services to provide their drug coverage," King said.

Montgomery attorney Jere Beasley, who represented the state, said AstraZeneca officials tried to settle the lawsuit after the jury began deliberations, but the state wanted to hear the jury's verdict.

"The law was very clear. The evidence was very clear," Beasley said.

AstraZeneca spokesman Tony Jewell said the lawsuit was unfounded and that numerous errors were made during the trial.

"The case was based on the misleading premise that the Alabama State Medicaid Agency did not understand the basics on how drug prices are established and reported," Jewell said.

AstraZeneca provides medicines to Medicaid programs "at the lowest price that we offer to our best business clients, as federal law requires," he said.

At the start of the trial, Beasley told jurors that AstraZeneca never provided the Medicaid agency with an "honest and accurate" price for its drugs.

But Tom Christian, a Birmingham lawyer representing the company, said in his opening statement that the prices charged the state were barely enough for pharmacists to stay in business. He said a big judgment against AstraZeneca that forces lower prices would make it financially impossible for pharmacists to fill prescriptions for Medicaid patients.

Price has scheduled trial for April 7 in the state's lawsuit against drug companies GlaxoSmithKline and Novartis AG.