Settlement of Medicaid drug case doesn't yet specify where money goes | Arkansas Blog

Tuesday, May 19, 2015

Settlement of Medicaid drug case doesn't yet specify where money goes

Posted By on Tue, May 19, 2015 at 1:31 PM

John Lynch at the Arkansas Democrat-Gazette reported this morning on a tentative settlement of issues remaining in the state's massive Medicaid fraud suit against Johnson and Johnson over improper marketing of the anti-psychotic drug Risperdal.

The state won a $1.2 billion verdict, but the Arkansas Supreme Court threw most of that verdict out, leaving open to retrial only a relatively narrow deceptive trade practices claim.

Attorney General Leslie Rutledge filed a motion this week, which was approved Monday by Circuit Judge Tim Fox, to tentatively settle the rest of the case for $7.75 million, including $2 million in fees and expenses for the Texas law firm that did most of the work in the seven-year-old case. In the original verdict, the firm stood to reap $181 million.

I looked up the order today, curious about what it might say about where the money won in the case — originated by Attorney General Dustin McDaniel — would go. It contains no reference and the attorney general's office said the full settlement isn't completed yet. Because of McDaniel's frequent diversion of lawsuit settlement money to his own purposes, the legislature put a $1 million cap on money won it such actions for attorney general's office use. But in the workout of another big class action against a financial rating service, some money was set aside for the attorney general to parcel out to various beneficiaries, along with swelling the money doled out by legislators in the annual pork barrel spending allotments.

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