Settlement Reached in Novartis Wholesale Drug Pricing Dispute

Madison, WI -- Novartis Pharmaceuticals Corporation reached a deal on Tuesday with the Wisconsin Department of Justice over the state’s claims that the drugmaker had artificially inflated the cost of its brand name prescription drugs, causing Wisconsin’s Medicaid program to reimburse pharmacies that dispensed the drugs to Medicaid recipients more than it should have.

Originally, the case was part of litigation brought by the state’s attorney general against 36 drug companies in 2004. The suit was scheduled for trial on February 2. The state and Novartis reached a deal that will put an end to Novartis’ role in the dispute. Novartis said that it still believed that the state's claims were "unfounded," opting to settle to avoid the "expense, inconvenience and uncertainty of protracted litigation."

"Through our settlement with the state, Novartis has admitted no wrongdoing," the company said in an emailed statement to Law360. "To the contrary, Novartis provides millions of dollars every year to the state of Wisconsin, which enables Wisconsin to fairly pay its pharmacies and assure that Wisconsin Medicaid beneficiaries have access to Novartis’ innovative medicines."

Novartis was represented by Barbara Neider, Meg Vergeront and Kyle Engelke of Stafford Rosenbaum, together with Saul P. Morgenstern, Mark D. Godler, Samuel N. Lonergan, Nathan Cohen, Marisa Orlandi, Diana Sterk and Kimberly Gelfand of Kaye Scholer LLP, and Harlan I. Prater IV of Lightfoot Franklin & White LLP.

The case is State of WI vs. Abbott Laboratories et al., case number 2004-CV-001709, in Dane County Circuit Court.

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