Ala. judge OKs AstraZeneca fraud verdict

The jury had ordered the company, the U.S. subsidiary of Britain's AstraZeneca PLC, to pay $40 million in compensatory damages and $175 million in punitive damages. But Circuit Judge Charles Price ruled that state law limits punitive damages to three times compensatory damages and cut the amount down to $120 million.

A spokeswoman for AstraZeneca said the company would appeal to the Alabama Supreme Court.

The verdict in February came in the first trial of lawsuits filed by the state against more than 70 drug companies. The lawsuits claim the state was overcharged for prescription drugs for Medicaid recipients.

Two other drug companies, Novartis Pharmaceuticals and SmithKline Beecham Corp., are currently on trial in the litigation in Montgomery.

One of the state's lawyers, Montgomery attorney Jere Beasley, said it was important that the judge found punitive damages were supported by the evidence. He said the court also "correctly found there was sufficient evidence that the defendants committed fraud" in pricing drugs for the poor and elderly in the state's Medicaid program.

"We believe this is a most significant finding by the trial judge who heard the evidence and found that the defendants committed intentional fraud," he said.

AstraZeneca spokeswoman Laura Woodin said the company was pleased that the judge "reduced the amount of punitive damages as required by Alabama law."

"However, we are disappointed that Judge Price did not set aside the jury's verdict in its entirety," Woodin said. "AstraZeneca has fully complied with the law, government guidelines and contracts that govern Medicaid pricing."

Drugs manufactured by AstraZeneca include Nexium, which is used to treat heartburn and acid reflux, and Crestor, which is prescribed to lower cholesterol.