Medicaid drug fraud trial a Who’s Who of lawyers

MONTGOMERY - The first of what could be dozens of civil trials involving allegations of drug pricing fraud begins Monday in Montgomery with the participants’ list being a who’s who of multinational corporations and renowned lawyers.

It will be grand legal theater in a tiny courtroom presided over by a senior, experienced judge. It also will involve a relatively young attorney general with political ambitions.

Republican Attorney General Troy King has hired a national trial lawyer to get every dollar for Alabama he can in the civil fraud trial against AstraZeneca LP. The British firm sells prescription drugs to the state Medicaid program.

In AstraZeneca’s corner will be one of the most popular and effective former state officeholders in Alabama — former Democratic attorney general and Lt. Gov. Bill Baxley, now a Birmingham attorney.

Baxley will be pitted against attorneys from the national law firm of Jere Beasley, himself a former Democratic Alabama lieutenant governor.

Beasley was hired by King, along with Mobile plaintiff bar attorneys Caine O’Rear III and Clay Rankin III.

There are dozens of lawyers involved in all 75-plus cases filed in connection with the drug pricing fraud accusation.

Attorneys for other defendants include former Alabama Chief Justice Bo Torbert and former Ethics Commission Chairman James H. Anderson.

The trial begins at 9 a.m. in the courtroom of Montgomery County Circuit Judge Charles Price.

Price already asserted his authority to ensure a fair trial, even sealing some documents as is common in business-related lawsuits. He went one step further with a gag order.

King sued nearly 80 drug manufacturers or distributors for reported fraudulent pricing of prescription drugs that were paid by the Medicaid program.

In 2006, Medicaid spent $311 million on prescription drugs for its nearly 900,000 recipients. The lawsuit claims it should have been much less.

It will be the second major fraud trial in Alabama in the last decade.

The Supreme Court recently overturned a multi-billion punitive damage award against oil giant ExxonMobil that originally was in Alabama’s favor. The oil company last week paid $121 million in a much-reduced award to the state.

AstraZeneca had $26.5 billion in sales in 2006 from products such as the Crestor cholesterol drug and the Nexium acid reflux drug. Nexium alone brought in $5 billion.

In its 2006 annual report, AstraZeneca said it faced lawsuits from Alabama and 10 other states.

AstraZeneca officials were asked to comment last week but didn’t return a phone call.

The case has been in mediation, but the efforts did not produce results. A jury has been struck and the trial is scheduled for Monday.

The amount being sought in damages has not been specified but they could be Monday in opening arguments.

At stake for Alabama’s financially ailing Medicaid program is the potential to collect actual losses, plus triple punitive damages — if the state prevails in the jury trial.

Similar lawsuits in Alabama and elsewhere have borne financial fruit.

On Jan. 9, King announced $6.75 million in a settlement with two defendants, Dey LP and Takeda Pharmaceuticals of North America. Dey agreed to pay $4.75 million and Takeda $2 million.

The money will go back to the state.

“These settlements are a significant step towards protecting Alabama’s poorest citizens and the scarce resources they depend on to provide for prescription drugs,” King said in a statement.

In a federal court in Massachusetts, AstraZeneca was ordered to pay $12.9 million for boosting published average wholesale drug prices.

In an unrelated case, King said a national settlement of $649 million against Merck & Co. Inc. will bring $2.8 million back to the state Medicaid program.

Dana Beyerle can be reached at (334) 264-6605 or dtb123@aol.com.