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May 20, 2002
 |  BioCentury  |  Politics, Policy & Law

Tobacco-style litigation against pharma; India drops second shoe on patents

Pharmaceutical companies are bracing for what one Washington industry representative calls "the mother of all lawsuits." Word is that 20 to 30 state attorneys general plan to launch a massive suit alleging that pharma companies have manipulated prices by a variety of means, including inflating the Average Wholesale Price (AWP) used to calculate Medicaid and Medicare reimbursements and blocking generic competition. Some of the biggest biotech companies may be targeted.

Richard Scruggs, the Pascagoula, Miss., lawyer who led suits against the asbestos and tobacco industries, told BioCentury that he has had "informal discussions with several state attorneys general" about litigating against drug companies. He predicted that a number of states "will get together on it because it is impacting every state's Medicaid budget enormously. I see this being a nationwide assault" on pharmaceutical companies.

Scruggs noted that Nevada and Montana already have launched suits and investigations of AWP practices and said that other states are poised to announce similar activities. "When the big states, like California, Florida or Texas, weigh in,...

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