Saul Morgenstern Quoted by The American Lawyer on Alabama Supreme Court Ruling on AWP litigation

Saul P. Morgenstern, Partner and Chair of the Antitrust Practice Group, was quoted on October 19, 2009, by The American Lawyer in the article “In Blockbuster Ruling, Alabama Supreme Court Overturns Pricing Fraud Verdicts Against Drug Companies.”  The Supreme Court of Alabama ruled that there was no basis for the state’s fraud claims against three drug companies appealing adverse jury verdicts. Kaye Scholer successfully represented Novartis Pharmaceuticals Corporation, one of the three drug companies, obtaining reversal of the $33 million jury verdict against it. The Alabama Supreme Court found that there was no basis for the state’s intentional fraud claim.  The court found that evidence presented by the pharmaceutical companies belied the state’s fraud theory. The decision was the first by an appellate court in the country to address an AWP-based fraud claim.

Mr. Morgenstern was asked whether the Alabama ruling would have an impact on other state drug pricing fraud actions against pharmaceutical companies. “Other courts in other states should take a look at the ruling and consider what the Alabama Supreme Court found about how the AWP was viewed in the drug marketplace,” he said.  “Alabama and all the other states have known for 25 years that the AWP wasn’t a true average of wholesale prices.  They’ve baked that knowledge into their reimbursement policies.”  According to Mr. Morgenstern, the Supreme Court ruling should put an end to Alabama’s drug pricing fraud claims against the pharmaceutical industry.