Government Contingent Fee Contracts

This post is not from the Dechert side of the blog, as Dechert handled the successful appeal of the case being discussed.

We haven’t really covered “Average Wholesale Price” (“AWP”) litigation very much because, while it is typically brought against pharmaceutical defendants, it’s about as far from product liability litigation as, say anti-trust or securities law.  But it’s hard to ignore when a state supreme court blows out such claims (as here).  It’s even harder to ignore when the state supreme court in question is ours.  So here’s what the Pennsylvania Supreme Court recently did to an AWP
“verdict.”

Briefly, and at the risk of oversimplification, “average wholesale price” is a term used to describe a much-tinkered-with basis for determining how much manufacturers may charge governmental purchasers of drugs used in public programs.  Governmental plaintiffs claim that drug manufacturers manipulated the AWP to overcharge them.  Manufacturer defendants counter that AWP is a misnomer, and was not intended or calculated to be as limited as the governmental plaintiffs claim.  Manufacturers also point out, with lots of evidence to back them up, that governmental units were at all times well aware of
what the drawbacks and complexities of what AWP quotation did (or did not) mean.  There are many other issues in AWP litigation, but these are the biggies.

First of all, we wish to point out that the trial result in Pennsylvania was not really a verdict.  In Commonwealth v. TAP Pharmaceuticals (Bristol Myers Squibb Appeal), No. 85 MAP 2011, slip op. (Pa. June 16, 2014), the jury had the good sense to enter a defense verdict on all the claims submitted to it.  Id. at 16.  However, Pennsylvania’s consumer protection statute is quirky, and does not provide for a jury trial.  So the trial judge got snookered.

Second, before we get accused of affording this decision too much significance, yes we know that it’s styled as an “opinion in support of reversal” by an evenly divided (3-3) court.  However, all six sitting justices agreed entirely with the rationale reversing the lower courts.  The only disagreement was that the OAJC would have dismissed the case outright and entered judgment n.o.v., whereas the concurring opinion – not an opinion in support of affirmance – wanted a remand.  So as not to have the bizarre result of a 3-3 split resulting in an affirmance by operation of law of a decision that nobody thought should stand, the OAJC gave in as to that outcome.  OAJC at 23.

Continue Reading Pennsylvania Supreme Court Blows Out AWP Verdict

Back in January, we put up a short post noting the filing of a petition for extraordinary (“King’s Bench”) review in the case of Commonwealth v. Janssen Pharmaceutica, Inc., No 0108002818 (Pa. C.P. Phila. Co.). It’s a case involving alleged off-label promotion of Risperdal, a widely prescribed “atypical” anti-psychotic medication. We posted a copy

We’ve posted before – here, here, and here – about the constitutionality issues (among many other problems) that we think are inherent whenever governmental units hire, without legislative approval, private outside contingent fee counsel to sue people (especially our clients) for money damages. Indeed, the issue is pending right now in the Supreme

Another state rejects public nuisance in the product liability context – although only after the defendants were forced through “the longest trial in [state] history.”

What did the Rhode Island Supreme Court hold in State of Rhode Island v. Lead Industries Association, Inc., 951 A.2d 428 (R.I. 2008). Here’s a synopsis:

(1) The court finally

We led the charge on this issue.

Every once in a while, even a blind squirrel finds an acorn.

On April 4, a California trial court prohibited municipal governments from using private lawyers hired on a contingent fee basis. See County of Santa Clara v. Atlantic Richfiled Co., No. 1-00-CV-788657 (Cal. Super. Ct. Apr.

We’ve been leery of the practice of government’s hiring private personal injury lawyers on a contingency fee basis to press lawsuits against non-resident product manufacturers from the moment that practice arose not very long ago. The government is supposed to be neutral and unbiased – something that’s impossible where attorneys conducting government business don’t get