State AGs amp up legal attacks on Big Pharma
Maverick states could cost Big Pharma big money. Though many drugmakers have wrapped up marketing settlements with the federal government--and states willing to go along--they're now facing claims from state attorneys general who are bold, stubborn, ambitious or all of the above.
As The Wall Street Journal reports, states opting out of group settlements are going after drugmakers on multiple fronts. Attorneys general in Kentucky, Maryland and 5 other states are suing GlaxoSmithKline ($GSK) over Avandia, saying the drugmaker violated consumer protection laws in marketing the drug. These state officials didn't join in with last year's $90 million settlement, which wrapped up claims from 37 states and the District of Columbia.
"We opted out of the multistate because we felt we could obtain a better result by taking our own action," a Kentucky spokeswoman told the WSJ.
Bristol-Myers Squibb ($BMY) and Sanofi ($SNY) have found themselves targets, too; Mississippi and West Virginia have sued, claiming deceptive marketing of their blood thinner Plavix. South Carolina sued Teva's ($TEVA) Cephalon unit for off-label marketing of the wakefulness drug Provigil. The WSJ has a handy table summarizing the various state cases.
Some of these AGs have no doubt been emboldened by rich awards in previous cases. The Big Kahuna was a $1.2 billion judgment against Johnson & Johnson ($JNJ) in Arkansas, after a jury determined that the company's Risperdal marketing deceived consumers and defrauded Medicaid. J&J also agreed to pay the state of Texas $158 million to settle Risperdal claims.
Glaxo has already inked a $3 billion settlement with the U.S. Justice Department and participating states, covering marketing violations on Avandia and other drugs. So, fighting individual state actions comes after a long slog with whistleblowers and the feds. J&J is still working on its Justice Department deal.
As the WSJ notes, industry leaders aren't happy about the multiplying state claims. PhRMA has filed a brief supporting J&J in its appeal of the $1.2 billion Arkansas award. "Imposing state-law penalties on manufacturers for alleged violations [of federal drug law] raises serious legal and constitutional questions," a PhRMA spokesman told the newspaper.