Saul P. Morgenstern, Partner and Chair of the Antitrust Practice Group, was quoted on October 16, 2009, by Law360 in the article “Ala. High Court Reverses $275M AWP Decisions.” The Alabama Supreme Court overturned two jury decisions awarding the state $275 million from three pharmaceutical companies, which the state accused of fraudulently inflating the price of their prescription drugs. Kaye Scholer successfully represented Novartis Pharmaceuticals Corporation, one of the three drug companies, obtaining reversal of the $33 million jury verdict against it. The Court found that as a matter of law the state cannot claim that it was misled by the manufacturers’ pricing policies because for at least 30 years the state knew that the average wholesale prices were higher than the prices pharmacists paid for the medications.
“The decision confirms that Novartis’ published prices were at all times consistent with pricing terms used and understood by all participants in the pharmaceuticals markets, including Alabama Medicaid,” Mr. Morgenstern said. “The State understood those prices and set its reimbursements at levels intended to fairly compensate pharmacies for their important role in dispensing prescriptions to Medicaid patients. There was no fraud here, and we are pleased that the Alabama Supreme Court recognized that.”