We were all set to write about another setback for AstraZeneca in the litigation over reimbursements based on average wholesale prices for pharmaceuticals — Thursday’s $14 million verdict against the company in a Medicaid drug pricing fraud case brought by the state of Kentucky — when we got news that completely shifts the momentum in the sprawling, multistate AWP litigation. The Supreme Court of Alabama, in a 44-page opinion that details the 30-year history of state and national drug pricing policy (pdf), ruled there was no basis for the state’s fraud claims against three drug companies appealing adverse jury verdicts. The ruling wipes out verdicts of $33 million against Novartis, $81 million against GlaxoSmithKline and $215 million (reduced post-trial to $160 million) against AstraZeneca. It also dismisses the state’s claims against the three companies.

Alabama’s Supreme Court found that evidence presented by the pharmaceutical companies belied the state’s fraud theory. “The sine qua non of the state’s fraud claims in these appeals is its assertion that it did not know that the published [average wholesale prices] were merely suggested — or list — prices, exclusive of discounts and other incentives available to wholesalers and providers,” the court wrote. “This assertion is untenable in light of the correspondence and internal memoranda involved in the state’s formulation of its reimbursement methodology.” And because the state knew the AWP was not a true wholesale price average, the court found, it could not claim to have been defrauded by the drug companies.

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