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Supreme Court Affirms Trial Court in Medicaid Pharmaceutical Pricing Case


MADISON — The Wisconsin Supreme Court today announced its decision in State of Wisconsin v. Abbott Laboratories, et al., Case No. 2010 AP 232-AC. The decision follows an appeal from a 2009 judgment against Pharmacia Corporation, which imposed $9 million in damages, imposed forfeitures of $4,578,000, and awarded costs and attorney fees in the amount of $8,819,352.44, for Pharmacia's conduct related to the use of “Average Wholesale Prices” (AWP) to set the price for drugs purchased by the state Medicaid program.


In its decision, the Court held that the State was entitled to a jury trial on its claim for damages, that there was sufficient evidence to affirm the jury verdict of $9 million in damages for Wisconsin Medicaid, and that the trial judge, the Honorable Richard G. Niess, properly assessed the number of violations for which a forfeiture could be assessed. These three issues had been certified to the Supreme Court by the Court of Appeals. The case will now go back to the Court of Appeals to address the remaining issues not certified to the Supreme Court.


Wisconsin Attorney General J.B. Van Hollen commented on today's decision, stating, “We place a high priority on protecting taxpayer dollars. Companies who defraud the State's Medicaid program need to be held accountable because fraud reduces the money available to those who truly need assistance. Today's decision goes a long way toward holding Pharmacia accountable and puts the other AWP defendants on notice that the State of Wisconsin is prepared to do whatever it takes to bring these cases to a successful conclusion for the people of this State.”


The case against the pharmaceutical manufacturers was filed in Dane County Circuit Court in 2004. To-date the State has recovered over $17 million in settlements with 10 of the named defendants in addition to the $22 million in damages, forfeitures, and costs awarded against Pharmacia. Claims against 25 other manufacturers remain pending. The trial court proceedings against the remaining manufacturers have been stayed pending the results of the Pharmacia appeal.


Wisconsin Medicaid is a healthcare assistance program for the needy and disabled jointly funded by the state and federal government.


The Supreme Court's decision is available at: