The state of Alabama has announced it has reached an $89 million dollar settlement with 14 drug manufacturers over alleged Medicaid fraud. This settlement comes on the heels of several large Alabama jury verdicts surrounding the alleged Medicaid fraud. Most recently, a Montgomery Alabama jury returned a $78 million dollar judgment against the drug manufacturer Sandoz, a subsidiary of Novartis. Private law firms were hired by the state of Alabama to prosecute these lawsuits. There are several advantages to the state hiring Alabama law firms to handle these suits as opposed to the state attorney’s general office handling these cases. First, prosecuting large scale fraud cases such as these requires a large investment of time and resources the attorney general’s office is unable to devote to such cases. It is a certainty with so much at stake these large drug companies will have corporate lawyers who will devote massive amounts of time and resources to fight these claims, then so should the state of Alabama.
Second, the attorney general’s office does not have the experience in handling Average Wholesale Prices (AVP) litigation that an experienced Alabama trial lawyer does. Consequently, it is a win – win situation for the State of Alabama as the state gets the maximum amount of compensation it can by having experienced Alabama attorneys to represent it.