Sandoz Inc. v. Commonwealth ex rel. Conway
405 S.W.3d 506
Ky. Ct. App.2012Background
- Consolidated actions about inflated AWPs used to set Medicaid reimbursements.
- Commonwealth sued Sandoz and AstraZeneca for false or inflated AWPs under multiple statutes.
- AWP data supplied by First DataBank; federal guidance warned AWPs were inflated.
- Commonwealth used AWP within its reimbursement formula, but discounts acknowledged; some reforms attempted.
- Jury found Sandoz and AstraZeneca liable; damages awarded; JNOV motions denied by trial court.
- Court reverses, concluding no damages causation; in pari delicto bars recovery; remands for judgment for appellants.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Causation of damages established by inflated AWPs | Commonwealth argues false AWPs caused over-reimbursement | Sandoz/AstraZeneca contend Commonwealth knew of inflation; no causation | No causation; JNOV for appellants |
| Sufficiency of evidence to prove liability | Commonwealth asserts evidence supports deception | Appellants contend no proper linkage to damages | Evidence insufficient for liability; complete absence on causation |
| Equity/pari delictobar to recovery | Commonwealth seeks damages despite complicity | In pari delicto bars recovery | Equity bars recovery; Commonwealth cannot recover |
Key Cases Cited
- Hargis v. Baize, 168 S.W.3d 36 (Ky. 2005) (requires showing substantial factor in damages)
- York v. Petzl America, Inc., 353 S.W.3d 349 (Ky.App. 2010) (in pari delicto considerations inform relief)
- Forbes v. City of Ashland, 55 S.W.2d 917 (Ky. 1932) (equity limits relief when both parties are at fault)
- Eline Realty Co. v. Foeman, 252 S.W.2d 15 (Ky. 1952) (in pari delicto principles applicable)
- Commonwealth v. Benham, 816 S.W.2d 186 (Ky. 1991) (standard for reviewing jury verdicts; sufficiency analysis)
- Radioshack Corp. v. ComSmart, Inc., 222 S.W.3d 256 (Ky.App. 2007) (reviewing denial of JNOV; favorable inferences for plaintiff)