Out-of-state law firms trying to piggy-back onto Wisconsin’s potential legal settlement with a pharmaceutical wholesaler got no relief earlier this month when a Dane County judge dismissed their lawsuit, calling it “parasitic” and accusing the firms of trying to “eat more than their fair share from that table.”

The case was dismissed by Circuit Court Judge Richard Niess, who said the intruders were trying to hijack the efforts of the state’s lawyers. Millions of dollars are at stake, as for the past six years state and federal lawyers have successfully chased pharmaceutical companies into huge settlements over Medicaid fraud allegations.

In Wisconsin, Department of Justice lawyers in 2004 joined the legal fight against artificial and inflated pricing of brand-name and generic drugs bought with Medicaid money, winning settlements of more than $40 million. Since January, 2009 it has teamed with other states and federal lawyers targeting the California-based wholesaler McKesson Corp. A settlement could recover $50 million in damages, the judge estimated.

In June, law firms from Washington, South Carolina, Mississippi and Washington, D.C., filed a complaint in Wisconsin claiming they were “whistleblowers” in the fraud case. The complaint claimed a share of whatever money DOJ lawyers eventually recovered from McKesson.

Niess, who has overseen several of the complicated lawsuits, responded bluntly: By that logic, the lawyers would have “essentially, hijacked” Wisconsin’s “deliberate, years-long litigation strategy against the pharmaceutical industry.”

Though the out-of-state lawyers have participated in developing claims and evidence against McKesson, so have Wisconsin’s lawyers, he wrote.

“The state has ‘been all over’ these Medicaid fraud claims against McKesson for a number of years,” Niess wrote, and the out-of-state lawyers “bring no real meat to the Wisconsin table.”

Allowing the case to proceed “would essentially throw away $37.5 million of state taxpayer money,” the judge wrote, calling the move “simply a parasitic opportunistic attempt at self-aggrandizement by the law firm plaintiffs to the severe detriment of the citizens and taxpayers” of Wisconsin.

Daniel Kotchen, of Washington, D.C., a lawyer for the four law firms filing the complaint, was not available for comment on the dismissal.


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