Wyeth and Pfizer Agree to Pay $784.6 million To Resolve Allegations of Underpaying Medicaid Rebates Under the Medicaid Drug Rebate Program
ATLANTA- Attorney General Sam Olens announced today that Georgia reached an agreement in principle to settle allegations against Wyeth, a wholly owned subsidiary of Pfizer, Inc. The settlement will resolve allegations that Wyeth knowingly underpaid rebates owed under the Medicaid Drug Rebate Program for the sales of Protonix Oral and Protonix IV between 2001 and 2006. Under the settlement Wyeth agreed to pay $784.6 million to the United States and the States. Georgia will receive over $3.2 million under the settlement.
Attorney General Olens said, “This settlement demonstrates our continued commitment to protecting taxpayer dollars and holding drug companies accountable for causing Medicaid to pay more than it should for pharmaceutical drugs.” The settlement stems from two whistleblower lawsuits, U.S., al., ex rel. Kieff v. Wyeth Pharmaceuticals, Inc., Civ. No. 03-cv-12366, and U.S. et al., ex rel. William St. John LaCorte v. Wyeth, Civ. No. 06-cv-11724, which were filed in the United States District Court for the District of Massachusetts. Wyeth, Inc. was a Delaware corporation with its headquarters in Madison, New Jersey. Pfizer, Inc. is a Delaware corporation headquartered in New York, New York. Pfizer acquired Wyeth, Inc. in 2009, after the conduct alleged in the lawsuits.
The Medicaid Drug Rebate Program requires participating pharmaceutical manufacturers to pay quarterly rebates to State Medicaid programs for each of its drugs sold to pharmacies that were reimbursed by Medicaid. The quarterly rebate was determined from each pharmaceutical manufacturer’s reported “Best Price,” or the lowest price for which it sold a covered drug in a particular quarter. The settlement resolves allegations that Wyeth failed to report discounts it gave to certain hospitals, thereby allegedly falsely reporting its Best Prices for Protonix Oral and Protonix IV and underpaying rebates owed to the Medicaid Drug Rebate Program.
The State settlements were negotiated by a team of States led by representatives from the Office of the Attorneys General for New York, North Carolina, Indiana and the Commonwealth of Massachusetts working with the Department of Justice, the United States Attorney’s Office for the District of Massachusetts, and the United States Department of Health and Human Services Office of Inspector General.