US Sandoz Arm Fights US Overpay Lawsuit

Sandoz, Inc., the US arm of Novartis’ generic drugs division, is asking the Supreme Court of the US state of Mississippi to reverse a county court’s $38.2 million judgment against the company alleging it overpriced drugs sold to the state’s Medicaid program.

The court is scheduled to hear arguments on Jun 29 in the case dating back to 2011. At that time a judge in Rankin County ruled that Sandoz charged inflated fictitious prices for its generic drugs, which caused Mississippi Medicaid to lose money by paying pharmacies too much.

The lawsuit is one of many that have been filed against drugmakers across the US. In the Mississippi case, attorney General Jim Hood argued that pharmaceutical producers were quoting wholesale prices far above the actual average price.

Attorneys for Sandoz have argued that the subsidiary of the Swiss pharmaceuticals giant reported accurate prices and actually saved the Mississippi Medicaid program millions by providing less expensive generic drugs.

The company contends also that the attorney general brought the lawsuit under Mississippi's Consumer Protection Act but proved no harm to consumers or fraud.

In 2011, Mississippi settled a lawsuit with four drug companies including GlaxoSmithKline, Aventis, Schering/Warrick and Mylan after allegations of Medicaid fraud and consumer protection violations related to inflation of the average wholesale price of drugs.