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Alabama High Court Issues Landmark Drug Pricing Decision

Late in 2009, the Alabama Supreme Court issued one of the year’s most significant state court rulings, reversing verdicts against three prescription drug makers totaling over a quarter billion dollars. The decision, AstraZeneca LP v. State, is “exemplary of litigation currently pending in state and federal courts” involving allegations that the nationwide pricing policies of pharmaceutical manufacturers caused states to overpay for Medicaid recipients’ prescription drugs. The actions originated in 2005 when Alabama’s Attorney General partnered with outside contingency fee counsel to sue over seventy pharmaceutical manufacturers, including defendants AstraZeneca, Novartis, and GlaxoSmithKline. In an 8-1 ruling, the Alabama Supreme Court held that the defendants did not defraud the state.