Drug Makers To Pay $89 Million To Settle Alabama Medicaid Price Suits

Pharmaceutical companies agreed to pay an additional $89 million to Alabama in settlement of litigation against 72 companies accused of defrauding the state's Medicaid system by overcharging for drugs.

The state already reached settlements totaling $34.8 million and won jury verdicts of more than $352.4 million against defendants in the case.

The latest settlements resolves suits against drug manufacturers, including Abbott Laboratories (ABT), Aventis Pharma Ltd. (500674.BY), TEVA Pharmaceutical Industries Ltd. (TEVA), Ivax Diagnostics Inc. (IVD), Barr Laboratories Inc., Schering-Plough Corp. (SGP), Forest Laboratories Inc. (FRX) and Baxter International Inc. (BAX).

The litigation was filed in 2005 and alleged massive reporting of false prices to Alabama's Medicaid agency from 2001 to 2005.

Lawsuits are pending against 45 defendants in Alabama. The next trial is scheduled against Watson Pharmaceuticals Inc. (WPI) on June 22. A trial involving Mylan Inc. (MYL) is set for trial Sept. 21.

Twenty-two other states have similar suits pending.

Ala. settles suits with 6 drug firms for $89M

MONTGOMERY, Ala. — Six prescription drug manufacturers have settled Medicaid drug pricing lawsuits with the state of Alabama for $89 million.

Attorney General Troy King announced Friday that the settlements were reached with Abbott Laboratories, Aventis Pharmaceutical L.P., TEVA Pharmaceuticals USA, Shering-Plough/Warrick Companies, Forest Laboratories and Baxter International.

King only released the total amount of the settlements and did not say how much each company agreed to pay. Part of the agreement was that the state would not release the individual amounts.

The companies were among the more than 70 that King sued in 2005, charging them with manipulating the price that the state's Medicaid program pays for prescription drugs.

The state had previously settled with 10 companies for almost $35 million. The state's lawsuits against four companies have gone to trial, with the state winning judgments against each totaling $352.4 million.

King said Friday the bulk of the money from the latest settlement will go into the state's cash-strapped General Fund Budget. That's the budget that funds Medicaid, state troopers, prisons and other non-education state services.

Trial of the state's lawsuits against Abbott and Forest had been scheduled to begin June 22. A lawsuit against Watson Pharmaceuticals is still expected to begin on that date in Montgomery County Circuit Court.