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Important Pharmaceutical Industry Appellate Decision

On October 16, 2009, the Alabama Supreme Court reversed an $81 million fraud judgment against our client GlaxoSmithKline and rendered judgment in its favor. The case was one of a number of “Average Wholesale Price” suits filed by states (and others) against pharmaceutical companies around the country, and was on appeal alongside cases involving Novartis and AstraZeneca. The Court threw out all three verdicts – totaling some $274 million – and rendered judgment for all three companies. The Court’s decision, reported in the national press, is particularly significant to the pharmaceutical industry because it is the first appellate decision in the country to address AWP-based fraud claims. More than 20 other states have sued pharmaceutical manufacturers on similar theories and will now have to tangle with the Alabama Supreme Court’s very solid opinion.