Last week, AstraZeneca agreed to pay $68.5 million to 36 states and the District of Columbia to resolve litigation charging the drugmaker with illegally marketing its Seroquel antipsychotic, failing to sufficiently disclose potential side effects and withholding negative safety and effectivness info (back story). But seven states were not among them, including South Carolina, which has a pending lawsuit against the drugmaker. Now, though, AstraZeneca has filed a counterclaim.
The drugmaker alleges Attorney General Alan Wilson is violating its constitutional due process rights by prosecuting a "law enforcement action akin to a criminal proceeding" dressed up as a civil suit, The National Law Journal writes. And AstraZeneca accuses him of reaching an "unlawful" agreement to split a potentially "staggering" contingency fee among three private lawyers and his office (here is the state-court lawsuit).
"The underlying litigation, as it now stands, is an orchestrated plan by Attorney General Wilson and private counsel to seek the maximum penalty - in the absence of any actual deception...or actual harm from AstraZeneca's actions," the lawsuit charges. "Moreover, the Attorney General and private counsel now have created an enterprise whereby they will jointly attempt to exploit the Attorney General's law enforcement authority, so they can both profit on a massive contingency fee."
In making its charge, AstraZeneca points to a 2009 amendment to a fee agreement with three plaintiffs lawyers - Ken Bailey of Bailey Perrin Bailey; John Simmons of the Simmons Law Firm, and John Belton White Jr. of Harrison, White, Smith & Coggins - who get up to 23 percent of any penalties awarded to the state under the South Carolina Unfair Trade Practices Act. The AG's office would get 10 percent. "Both the Attorney General's and private counsel's financial interest in the 'successful' prosecution of claims against AstraZeneca could be staggeringly high," the suit states.
South Carolina filed its lawsuit against AstraZeneca in 2009 in hopes of recovering funds spent to treat Seroquel side-effects and for reimbursements for alleged off-label uses, the paper points out. Wilson's predecessor amended the lawsuit and dismissed every claim, except for penalties for alleged false statements in Seroquel labeling. The drugmaker maintains the state amended its fee agreement to delete a previous provision strictly limiting recovery to the lawyers to actual damages (here are the lawsuit against AstraZeneca and the fee agreements).
7 Comments
"In the absence of any actual deception...."
Thanks, to the WSJ, we've all read the internal emails: "So far we have buried trials x, y, and z......"
Even the great state of Michigan, which entirely bars its individual citizens from holding drug companies accountable, was part of the recent settlement with AZ.
That actually really does say something as a barometer of culpability.
Finally someone challenges the cozy relationship where the government does all the work and the plaintiff lawyers (not the plaintiffs) get the spoils. And from the sounds of things in this case, with a pre-determined goal of settling for money, not justice.
Sounds like a mess to me and they may lose out since the feds already settled.
Simply incredible hubris shown by this company, after all that we know they did to hide the awful side effects of Seroquel - and all the deaths we know that were caused by it.
How much longer will we stand by and allow the lawyers continue to steal these obscene fees that all of us have to pay for as they continue to inflate the cost of healthcare. While the Rx companies will get whatever punishment they deserve under the justice system, we seem to forget the money was for those hurt, not the lawyers. Can you imagine what criticism the Rx companies would endure if they earned the profits that these lawyers are stealing from these cases.
Greed lives. It is time for tort reform as we try to get soaring healthcare cost under control.
I actually agree with Jack about the overweening greed of some lawyers. But what I'm wondering is whether his seeming willingness to impose price control (tort reform) on lawyers would also apply to other arenas of commerce and the professions--pharma, insurance, hospital costs, procedure costs, end-of-life care, and so on.
The answer is yes because the growing cost of healthcare is going to eat us alive if we don't take action. While a abhor the thought of the government taking a meat ax to field, I frankly have not seen any other good solutions.
But with all the hospitals trying to pay for the latest technology with questionable procedures and pricing in order to stay "competitive", someone has to say enough is enough.
Presumably, tort reform would take care of some of these costs like insurance and possibly unnecessary procedures, but everyone will have to take a haircut.