Once again, a drugmaker is challenging a lawsuit filed by a state attorney general and, specifically, the use of a private law firm that has a contingency fee arrangement. The latest instance involves GlaxoSmithKline, which filed its lawsuit late last week against Louisiana Attorney General Buddy Caldwell, who last year filed a lawsuit that charged the drugmaker with fraudulently marketing its controversial Avandia diabetes pill (back story).
Over the past couple of years, a growing number of drugmakers have filed countersuits as a tactic to blunt efforts by the states to recover funds that were allegedly misspent by state programs for medications that later became the subject of allegations over improper marketing or undisclosed side effects. In their view, the drugmakres believe the outside counsel have improper incentives and limits are required. So far, the notion is gaining traction.
For instance, a federal court judge recently ruled that Merck can proceed with a lawsuit against the Kentucy Attorney General for violating its constitutional due process rights, because the state struck a contingency fee arrangement with two outside law firms to help pursue a lawsuit alleging the drugmaker violated the state consumer protection act in its marketing of Vioxx (read here).
And earlier this year, a South Carolina state court judge denied a motion by state Attorney General Alan Wilson to dismiss a lawsuit that AstraZeneca filed last year. The drugmaker filed that lawsuit in response to a 2009 lawsuit brought by Wilson, who sought to recover funds spent to treat Seroquel side-effects and for reimbursements for alleged off-label uses (see this).
In Louisiana, the drugmaker offers the same argument as Merck. Glaxo "believes that the Attorney General’s engagement of private counsel, on a contingency-fee basis, violates Louisiana statutes and Glaxo’s constitutional rights to due process. Glaxo is entitled under Louisiana and federal law to an unbiased prosecutor who has no financial interest in the outcome of the prosecution and who has been retained in accordance with statutory and constitutional legal requirements," according to a statement sent us by a spokesman (here is the Glaxo lawsuit).
Whether such maneuvers will prevail, of course, remains to be seen. The states have retained outside law firms because, in an era of limited staffing, they believe they lack the resources and expertise to pursue these cases otherwise. By offering a contingency fee, the state attorneys general hope to get the best of both worlds - a recovery without straining their staffs. However, this sort of outcome may be in jeopardy if one or more drugmakers win in court. We asked the Louisiana Attorney General for a comment and will update you accordingly.