Drug Companies Ordered to Pay $114M for Scamming State of Alabama

A state court jury on Tuesday found two major pharmaceutical companies defrauded Alabama in a long-running Medicaid drug pricing scheme and ordered the firms to pay more than $114 million in damages.

The jury found that GlaxoSmithKline should pay the state $80.8 million in compensatory damages and that Novartis should pay about $33.7 million in similar damages. But it declined to order any punitive damages.

The state had asked for as much as $800 million in total damages in what its attorneys claimed was a scheme to overcharge for Medicaid prescription drugs from 1991 to 2005.

The companies had denied any fraud, contending they followed proper procedures in setting drug prices.

GlaxoSmithKline is a London-based health care company with U.S. headquarters in Philadelphia and Research Triangle Park, N.C. Novartis is the U.S. affiliate of a Swiss company with U.S. headquarters in East Hanover, N.J.

The jury returned the verdict on its second day of deliberations.

It was the second trial of the state's lawsuits accusing more than 70 drug companies of Medicaid drug pricing fraud. In the first trial in February, a jury awarded the state $215 million against AstraZeneca Pharmaceuticals LP. Price, who also was the judge in that case, later reduced that verdict to $160 million.