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Drugmaker's conflict-of-interest action can proceed

Steven M. Sellers

Is a contingent-fee arrangement between a state attorney general and private law firms a conflict of interest? In an intriguing decision, a South Carolina court ruled that a declaratory judgment action by AstraZeneca on this issue can proceed because the drugmaker had stated “a valid claim for relief.” South Carolina had sued AstraZeneca for off-label marketing, retaining three law firms as special counsel, and those firms would share part of any damages award. The initial litigation alleges violations of South Carolina’s Unfair Trade Practices Act, for which a per-transaction civil fine may be imposed. AstraZeneca contends that the contingent-fee agreement is illegal because the case is the equivalent of a criminal case in which the prosecutor has a financial interest.

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