GlaxoSmithKline to appeal judgment in Alabama Medicaid pricing suit

GlaxoSmithKline (NYSE: GSK) announced today that it intends to appeal a Montgomery County Circuit Court jury verdict against GSK regarding the process for reporting of prices for drugs reimbursed by Medicaid in the State of Alabama.

The company was among 73 pharmaceutical manufacturers named in a lawsuit filed by the Alabama Attorney General in January 2005. Both GSK and Novartis argued before the Court in this round of litigation.

“We have said from the beginning that GSK reported true and accurate prices to the state of Alabama,” said Chilton Varner, an attorney with King & Spalding of Atlanta who represented GSK. “We believe the evidence shows the State made informed choices about how and how much to pay Alabama pharmacists. Evidence also shows that, although the State now says it was not being fairly treated, the State has not changed the rules since it filed the lawsuit more than three years ago.”

The Alabama jury found Novartis liable for $33.2 million in compensatory damages and no punitive damages, along with $80.9 million compensatory damages and no punitive damages against GSK. In February, a separate jury imposed similar charges against AstraZeneca, awarding the State $40 million in compensatory damages and $175 million in punitive damages. A state judge recently reduced that amount to $120 million, because Alabama limits punitive damages to three times compensatory damages.