Jury hits AstraZeneca with $215 million fine in price-inflation case

MONTGOMERY, Ala. An Alabama state court jury found AstraZeneca Pharmaceuticals at fault in inflating drug prices charged to the state’s Medicaid program, according to published reports. As a result, the company has to pay $215 million, $40 million in compensatory damages and $175 million in punitive damages.

Alabama claimed in its complaint, filed in 2005, that the companies overstated the average wholesale price of drugs, which is used to calculate Medicaid reimbursement rates to pharmacies.

AstraZeneca said the judge made numerous errors in the trial, which started Feb. 11. Those errors included barring evidence of how pharmacies manage Medicaid drug costs, according to the company.

AstraZeneca lawyer Thomas Christian told the jury in opening statements that state Medicaid officials had a complete understanding of how drug pricing worked. Once a drug was shipped to the wholesaler and then pharmacies, the company had no control over pricing, Christian said. The company plans on appealing the decision.

AstraZeneca is the first of more than 70 drugmakers sued by Alabama to go to trial. GlaxoSmithKline and Novartis Pharmaceuticals are scheduled for trial in April. Takeda Pharmaceuticals North America and Merck’s Dey unit settled pricing claims with Alabama last month for a combined $6.75 million while admitting no liability.