Sandoz, Inc. v. Alabama

Defendant Sandoz, Inc. appealed a judgment entered on a jury verdict in favor of the State of Alabama. The State alleged at trial that Sandoz, a manufacturer of generic pharmaceuticals, purposely reported inflated pricing information for generic drugs in third-party publications and that the State, using those published prices, overpaid certain reimbursements to providers of prescription drugs made pursuant to the Medicaid program. The State thus sued Sandoz seeking damages under various theories of fraud. Previously, in "AstraZeneca LP v. Alabama," (41 So. 3d 15 (Ala. 2009)), the State unsuccessfully sued manufacturers of brand-name pharmaceuticals under the same theories. Because in this case, as in "AstraZeneca," the State knew that the prices reported by Sandoz were not what the State claims they should have been, Alabama law does not allow the State to claim that its reliance on that information was reasonable. Further, the State's reimbursement decisions were not based on the allegedly false information provided by Sandoz; instead, its decisions were based on policy concerns and certain requirements of the federal Medicaid program. Thus, as was the case in "AstraZeneca," the State's claims should not have been submitted to the jury, and Sandoz was entitled to a judgment in its favor. Therefore, the Supreme Court reversed the trial court's judgment and rendered judgment in favor of Sandoz. View "Sandoz, Inc. v. Alabama " on Justia Law