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June 1st, 2012

Diabetes Drug Maker Fights Pay-to-Play in Once-and-Future Judicial Hellhole

Standing up to Louisiana’s attorney general and his personal injury lawyer pals, the maker of a widely prescribed treatment for Type 2 diabetes yesterday sought to end what it calls an unlawful fee arrangement in connection with the AG’s multibillion-dollar lawsuit against it.

GlaxoSmitAG CaldwellhKline LLC (GSK) makes Avandia, the diabetes drug that Attorney General James “Buddy” Caldwell (R) last year alleged in a lawsuit was illegally sold, priced, marketed and promoted, all at the expense of diabetes patients and taxpayers who foot the bill for the state’s Medicaid program.  Curiously, the state agency that runs the Medicaid program, the Department of Health and Hospitals (DHH), did not join Caldwell’s lawsuit.  In fact, DHH has long classified Avandia as a “preferred” drug that physicians are free to prescribe at their discretion, with the understanding that there are always risks of side-effects when prescribing complex drugs for profoundly ill patients.

But even more curious is the fact that two of the three private-sector personal injury lawyers Caldwell has hired on a contingency fee basis to prosecute the GSK lawsuit on the state’s behalf have not-so-coincidentally moonlighted as key officials for his election campaign.  So with Caldwell’s apparent blessing, the more money these private sector, profit-seeking personal injury lawyers can squeeze out of the defendant, the richer they’ll get and the more money they’ll be able to contribute to Caldwell’s next campaign.  Talk about pay-to-play.

Leaving aside the legal merits of the lawsuit against GSK, the pharmaceutical firm’s petition filed in state court on May 31 takes issue with the fee arrangement between Caldwell and his political patrons.  GSK seeks a “preliminary and permanent injunction,” barring prosecution of the state’s lawsuit against it pursuant to the fee arrangement Caldwell has with outside counsel because, GSK argues, that arrangement violates: the Louisiana Constitution’s separation of powers doctrine, procurement requirements mandated by state law, and GSK’s rights to Due Process of Law as guaranteed by the Fourteenth Amendment of the United States Constitution and Article 1, Section 2 of the Louisiana Constitution. 

In light of Louisiana’s again growing Judicial Hellholes reputation, AG Caldwell’s arrangement in this case with private-sector lawyers who are more likely to pursue their own self-interest than the public’s interest in justice seems very much like business as usual.

To GSK’s credit, it is refusing to be bullied.  It is fighting back and will not be quietly extorted by backwoods justice.  Tort reformers and good-government activists across the country will be watching closely and hoping GSK’s petition ultimately sets a precedent that helps put an end to pay-to-play coziness between activist attorneys general and their supporters comprising the personal injury bar.

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