State wins $38M case against drug maker

By Bobby Harrison/NEMS Daily Journal

JACKSON – The state of Mississippi has been awarded $38.2 million from drug manufacturer Sandoz after a two week trial in Rankin County Chancery Court.
Attorney General Jim Hood sued Sandoz, a Colorado-based generic drug company, claiming the company inflated its prices on drugs sold to Medicaid patients. Medicaid is a state-federal health care program for the disabled, elderly and poor pregnant women and children.
The Democratic attorney general held a news conference Tuesday afternoon to announce Rankin County Judge Thomas Zebert had issued a ruling awarding $38.2 million to the state for actual damages, punitive damages and for civil penalties.
Hood said he expects Sadoz to appeal the ruling.
“Sandoz, with its greed for more profits, caused Mississippi to overpay on drug prescriptions and some of our neediest citizens were being denied health care due to cost overruns,” Hood said in prepared remarks.
Hood pointed to “a smoking gun found in discovery where a company vice president said “to laymen it is very easy to create smoke and mirrors,” referring to the elaborate process where drug companies are compensated by the state for drugs sold to Medicaid recipients.
Sandoz did not issue a response to the judge’s verdict.
Hood has contracted with Ridgeland-based law firm Copeland Cook Taylor amp& Bush to sue more than 50 drug companies on similar grounds. He already had settled with seven companies for $38.7 million.
Copeland normally is a defense firm and much of its work is done defending insurance companies. But the firm, which includes former Democratic Gov. Ronnie Musgrove, brought the possible lawsuit to Hood in 2005.
Similar lawsuits have been filed against drug companies by other states and by the federal government.
Hood said the exact amount Copeland receives from the lawsuits will not be known until the litigation is complete. He estimated the law firm will receive about 20 percent of the settlement against Sandoz. Hood said under the terms of the contracts, which are posted on the web, the law firm receives more if the case goes to trial and is appealed.
Hood has been criticized for entering into contracts with private firms. But he said his team of six litigators is handling more than 3,000 civil cases and does not have the resources to pursue such a complex and costly case.
Under the terms of the contract, attorneys Hood contracts with only are reimbursed if they are successful.
bobby.harrison@journalinc.com