Trial of interest in St. Louis Circuit Court ends before it begins

Daily Record and the Kansas City Daily News-Press, Aug 20, 2008 by Kelly Wiese

A mistrial was declared Tuesday in a case being watched by lawyers from across the country.

The lawsuit itself is similar to many filed around the country in recent years. The state of Missouri, through the attorney general's office, sued several pharmaceutical companies alleging their pricing patterns forced government health programs to overpay for generic medications. About a dozen observers were present for the opening of the trial.

But after a day and a half of jury selection, the 12-member jury and two alternates were seated, and then a few members approached the judge to discuss concerns. After a private meeting with the attorneys, Judge David Dowd declared that the trial would not proceed because there might not be enough jurors to reach completion. It will be rescheduled, but a date was not immediately set.

Attorneys from other states, among them Alabama, Florida and Massachusetts, with similar cases had traveled to St. Louis Circuit Court to watch the trial unfold. Attorneys were hoping for a firsthand look at the evidence and witnesses used by both sides, and to gauge the jurors' reactions.

Missouri is not the first state where such a Medicaid fraud case was set for trial, but it was among the first to reach trial with this particular defendant, and those interested may return once the trial is reset.

The lead attorney for the state, Rex Burlison, said he has never seen jurors react like this in 30 years of practicing law. (Full disclosure: Burlison's niece, Sara Burlison, is art director for Missouri Lawyers Media, the Daily Record's parent company.)

The trial was expected to last about two weeks, and he said four jurors, upon learning they had been chosen, became very emotional about sitting through such a long trial. All had personal issues, from special-needs children without a regular caregiver to fear of struggling financially without a paycheck for that time, he said.

"It's a realization, with the emotions that came out in that 10- minute period, how far do you invest," he said.

Burlison said such issues were discussed in the jury selection process, but the attorneys believed they could press ahead and complete the trial. He said the trial had been set for a year and a half, with experts and witnesses coming in from across the United States and Europe.

Missouri's case began against several companies. But the state reached a $2.9 million settlement with Dey Inc. in late 2006. The scheduled trial was against Warrick Pharmaceuticals Corp. and parent companies Schering and Schering-Plough Corp.

Burlison, chief counsel for the attorney general's St. Louis office, said more than half of the states have filed suit against drug companies alleging such Medicaid fraud.

Burlison said defense lawyers in such cases work together and share information. So here state attorneys, who each bring their own case, can observe and figure out what works, and what they need to show a jury to win a case. He said one of his assistants in the Warrick case also headed to Alabama earlier this year to monitor a trial there.

Alabama has had two Medicaid trials making similar overpricing claims against different drug companies this year. In one case, a jury awarded the state $215 million, which was later reduced to $160 million; in another, jurors ordered two companies to pay a total of nearly $115 million.

Although attorneys from outside Missouri interviewed by The Daily Record declined to be identified by name, they said it's helpful to watch the process and get an idea of what works and what doesn't.

Trial on the same issue in another state can essentially provide a real-life focus group, for the mere cost of a plane ticket and hotel room.

"It's different characters in the same show. The plot is the same," Burlison said.

The lawsuit alleges the company gave false information about its drug prices, costs and sales to the state Medicaid program. The state claims the company inflated the reported average wholesale price of the drug, a factor used in setting rates the state Medicaid program pays providers for filling prescriptions.

The result was a greater spread between what pharmacists bought the drugs for and what the state paid back for them. So pharmacists stood to make more money on each transaction by choosing Warrick's version of a generic medicine, increasing its market share and sales of some products, the suit claims.

Burlison said Warrick's inflated pricing cost Missouri taxpayers $8 million more than they should have paid over a seven-year period. The suit also seeks punitive damages, but does not name a figure.

Warrick and Schering-Plough's lead attorney is Michael Moore, a partner with Sonnenschein Nath & Rosenthal in Dallas. Local counsel are Jim Virtel and Lisa Wood of Armstrong Teasdale.