Attorney General Dustin McDaniel on Monday asked the Arkansas Supreme Court to reconsider its ruling that threw out a $1.2 billion Medicaid-fraud fine against Johnson & Johnson and a subsidiary.
McDaniel wrote in a petition for rehearing that the court erred by dismissing the state’s Medicaid-fraud claim based on an interpretation of the Medicaid-fraud statute that was not presented by either party.
The arguments used to overturn the ruling were not raised in the initial appeal and were thus not properly before the court, McDaniel said.
The March 20 ruling reversing and dismissing a decision by Pulaski County Circuit Judge Tim Fox departed from “at least 170 years” of precedent.
The decision also does significant harm to the state and its citizens by stripping the attorney general’s office of a mechanism used to protect the integrity of the program, McDaniel said.
“The decision means that Arkansas Medicaid cannot fulfill its federal mandate to counsel patients and inform doctors and pharmacists about serious health risks because the source of that information - the drug companies themselves - cannot be sanctioned when they lie to Medicaid, its enrollees, and their doctors about those risks,” he wrote.
Monday was the deadline to ask the court to reconsider its decision.
Robyn Frenze, a spokesman for Janssen Pharmaceuticals, said the company was reviewing the petition.
“As we have maintained since this lawsuit was filed against us, we did not violate the Arkansas Medicaid Fraud False Claims Act. After a thorough review of the case, the Arkansas Supreme Court agreed with our position. We believe that the record speaks for itself and are prepared to vigorously defend our position,” Frenze said in a written statement.
The court’s March 20 ruling reversed and dismissed the lower court’s decision, which fined the company - through its Janssen Pharmaceuticals subsidiary - $5,000 for each of the 238,874 prescriptions filled for the anti-psychotic drug Risperdal that was reimbursed by the state Medicaid program.
Justice Karen Baker wrote in the court’s opinion that the Code Revision Commission “substantially altered” the language passed by the Legislature when it was prepared for the state’s law books. The commission’s version “rendered its meaning ambiguous.
The Medicaid-fraud statute did not apply in the Johnson & Johnson case because it only applies to health-care facilities seeking certification of a “nursing home or similar facility,” Baker wrote.
McDaniel said last week that the commission staff reviewed the language in the act passed by the Legislature and the version in the state’s law books and found no difference between them.
The attorney general wrote in the petition that the company had also “conceded” the state’s interpretation of the statute.
If there were inconsistencies between the law passed by the General Assembly and what was codified, the Legislature would have addressed them in the 21 years since its enactment, according to the petition.
“It is the General Assembly’s responsibility to oversee the [commission], and this court’s usurping that role here is a separation of powers violation,” McDaniel wrote.
McDaniel also asked the court to reconsider its ruling that Fox erred by allowing jurors to see a letter from the U.S. Food and Drug Administration.
The majority of the court found the 2004 letter instructing doctors to stop using promotional materials with misleading claims about the drug was “hearsay,” according to the Rules of Evidence because it was part of the FDA’s investigation into the drug and was “highly prejudicial.”
McDaniel argued that the letter was not “unfairly” prejudicial and was part of the FDA’s routine review of the company, which would make it admissible under the court’s rules.
Arkansas, Pages 9 on 04/08/2014