Sunday, October 3, 2010

Some Fascinating Juror Notes -- In Mass. Proventil® (Albuterol) False Claims Act Loss, For New Merck

A very interesting juror question (and answer -- from the very able Judge Patricia Saris), has been released into the PACER electronic record as of Friday, in the federal case legacy Schering-Plough lost in Massachusetts this week -- to the tune of a $4.6 million jury verdict, so far (pre-punitives). As background, here is some of Pharmalot's much-earlier coverage of the cases:

. . . .The three lawsuits were originally filed by a whistleblower, Ven-A-Care of the Florida Keys on behalf of California, Florida and the federal government. Schering-Plough also settled Florida and cut a deal with the federal government that involved a $44.5 million payment.

The settlement resolves allegations that Warrick Pharmaceuticals, a subsidiary of Schering-Plough, deliberately inflated the Average Wholesale Prices (AWPs) it reported to California for Albuterol. Medi-Cal sets the reimbursement rates for pharmacies for many of the drugs dispensed to Medi-Cal patients based on the AWPs reported by drugmakers, the statement says.

California pharmacies dispensed Albuterol to patients and were then reimbursed by Medi-Cal. By reporting falsely inflated AWPs, some drugmakers caused Medi-Cal to overpay millions of dollars in pharmacy reimbursement. . . .

Schering-Plough/New Merck has now lost the Massachusetts version of these cases; and punitives haven't been calculated by Judge Saris on that loss, yet.

Some eight pages of questions were asked by the jury, during their deliberations, in the Massachusetts case. To see all the questions, and answers, click here -- it's a 167Kb PDF file.

I found the below fascinating -- click to enlarge. In essence, the jury was asking Judge Saris what "determining rights to a benefit or payment" means under Massachusetts law. Judge Saris answered by explaining that a False Claim is made out under the Massacusetts statute, if Schering-Plough made any materially false statement which it knew would cause a reimbursement from Mass. Health to a pharmacy at an inappropriate price. These juror questions from later in the week, last week make it clear (to me, at least) that the jury was bound and determined to find against Schering-Plough on a whole host of grounds. Accordingly, I think New Merck would do well to settle now -- and not give Judge Saris an clean slate, on punitives.

This is one "Hassan Hangover" Merck ought to take two aspirins, with a strong cup of coffee, and some steak and eggs -- to promptly end, in my estimation.

This one will go from bad (now) to worse (later), in my opinion.

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