Mississippi Medicaid Pharmaceutical Average Wholesale Price Litigation v. State
190 So. 3d 829
| Miss. | 2015Background
- Mississippi sued Sandoz for allegedly inflating AWPs to increase Medicaid reimbursements.
- Medicaid used AWP to help determine Estimated Acquisition Cost under OBRA 90-driven reforms.
- AWP data were reported to First Data Bank, a national data service relied upon by Medicaid and other programs.
- Evidence showed a substantial spread between AWP and actual drug costs, used to market to pharmacies and boost market share.
- Trial court found Sandoz liable for common-law fraud and CPA violations, awarding damages, penalties, and punitive damages.
- Sandoz and the State cross-appealed on fees, prejudgment interest, punitive-damages caps, and MFCA claims.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Sandoz violated common-law fraud. | Sandoz knowingly published fictitious AWPs to deceive Medicaid. | AWP was a fictional benchmark; no intent to deceive Medicaid as actual prices. | Sandoz committed common-law fraud. |
| Whether Mississippi violated the Mississippi CPA sharing the fraud finding. | Sandoz’s AWP reporting was unfair/deceptive and caused substantial harm. | AWP was not a literal price; no deceptive practice under CPA. | Sandoz violated the Mississippi CPA. |
| Whether the trial court properly denied attorneys’ fees and prejudgment interest. | Fees granted when punitive damages awarded; CPA entitlement also supports fees. | Discretionary rulings; no automatic fees or prejudgment interest. | Discretionary rulings affirmed; no abuse found. |
| Whether the State’s punitive-damages cap applied to its claims against a state actor. | State should be exempt from caps as sovereign actor. | Cap applies to all actions under the statute; plain reading includes the State. | Punitive-damages cap applied to the State. |
| Whether Sandoz’s net-worth calculation for cap purposes was correct. | Use later net-worth data to maximize cap amount. | Net worth should be determined under GAAP as of hearing date. | Net-worth determined as of December 31, 2011; cap applied accordingly. |
Key Cases Cited
- Franklin v. Lovitt Equip. Co., Inc., 420 So.2d 1370 (Miss. 1982) (clear and convincing standard for fraud elements)
- Abbott Labs., 816 N.W.2d 145 (Wis. 2012) (Wisconsin’s AWP-related damages in AWP litigation)
- In re Pharm. Industry Average Wholesale Price Litig. v. AstraZeneca, 582 F.3d 156 (1st Cir. 2009) (affirmed fraud/price-inflation findings relating to AWP)
- United States v. Bornstein, 423 U.S. 303 (U.S. 1976) (per-violation focus under false-claims-type penalties)
- Wise v. Valley Bank, 861 So.2d 1029 (Miss. 2003) (even division affirmance principle for judgments)