AstraZeneca To Pay $14.7M To Kentucky

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fraud1Why? A state court jury decided the drug maker overcharged Kentucky’s Medicaid and compensatory damages are in order. However, only $100 in punitive damages was awarded. The state, by the way, sought $16 million in compensation plus unspecified damages, Bloomberg reports.

The ruling is the latest legal setback for AstraZeneca over the way its pricing. The drug maker was ordered by a jury in Alabama last year to pay $215 million for overcharging that state’s Medicaid program (back story). A judge later reduced that to $160 million, and AstraZeneca is appealing. In 2007, a federal judge in Boston ordered the drug maker to pay $12.9 million for overcharges, and an appeals court last month upheld the decision, Bloomberg reminds us.

“We are thrilled with the verdict,” Allison Martin, a spokeswoman for Kentucky Attorney General Jack Conway, tells the news service. The $100 punitive award “is not disappointing when you have a $14.7 million award.”

The state accused AstraZeneca of posting AWP, or average wholesale prices, that were much higher than what doctors and pharmacists actually paid for the medicines, and of “marketing the spread” to win business.

For its part, AstraZeneca Kentucky knew AWP was a term that didn’t refer to actual sales prices for its drugs. The state benefited from the AWP system because it encouraged Wal-Mart, Walgreen and other pharmacy operators to participate in the state health program, according to Bloomberg.

“AstraZeneca is disappointed by the jury’s decision and is considering our options, including appeal,” company spokeswoman Laura Woodin said in a statement to the news service. “We continue to believe that the Commonwealth of Kentucky’s claims against us are unfounded.”

The trial is the second AWP case to go to a jury in Kentucky, which has sued 47 companies over the practice. Novartis’s Sandoz unit was ordered by a jury in June to pay $16 million for overcharging the state’s Medicaid health program for the poor, the news service notes.

Kentucky has settled AWP claims with other companies, including $2.4 million with Amgen, $10 million with Bristol-Myers Squibb and $2 million with a unit of Baxter. A trial against GlaxoSmithKline is scheduled for November.

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