On January 29, 2018, Mississippi Attorney General Jim Hood announced a $33 million settlement with pharmaceutical manufacturer, Watson, Inc., which is now part of Teva Pharmaceuticals.
AG Hood had hired attorneys to sue Watson in a series of suits claiming the company wrongly inflated prescription drug prices paid by the state-federal Medicaid health insurance program.
The State’s Supreme Court upheld a trial court decision that found Watson defrauded the taxpayers of Mississippi by an estimated $7 million when reporting its Average Wholesale Prices. Inflated prices varied from drug to drug, in some cases as much as 1,000 percent. As a result of this fraud, the trial court awarded the state statutory and punitive damages for a total of $33,408,546.72. The Watson case was one of dozens brought against other drug companies that also inflated drug prices causing Mississippi Medicaid to pay too much for prescription drugs.
According to AG Hood, “Of all the companies we have done battle with, Watson Pharmaceuticals is one of the worst offenders. The trial court found they overcharged the state by 1,000 percent on some drugs. A chancery judge in Rankin County issued a $20 million punitive damage verdict, which was upheld by the Mississippi Supreme Court. These types of corporate robbers get away with it unless an attorney general holds them accountable.”
Hood is now using this settlement to disparage current legislative proposals that would limit his power to sue. Mississippi House Bill 1238, recently passed by the House, would bar him from suing under the state’s consumer protection law if the practices are permitted by other Mississippi or federal regulators.
In his press release announcing the settlement, AG Hood also released a statement,
“Should HB 1238 pass, it would be devastating to the protection of Mississippians,” said General Hood. “Much of the successes in our office have been protecting consumers from corporate wrongdoers, and the people of Mississippi deserve more than their lawmakers stripping those protections.”
According to local reports, it is unclear whether the measure will survive in the Senate.
The total settlement is $33,408,546.72, of which $8,143,572.49 are compensatory damages to the Medicaid unit of Mississippi, $5,241,000.00 are civil penalties, and $20,023,974.23 are punitive damages.