Multi-State Agreement Settles Allegations Against Pfizer Subsidiary in $784 Million Settlement 2

Multi-State Agreement Settles Allegations Against Pfizer Subsidiary in $784 Million Settlement

TALLAHASSEE, Fla.—LawFuel.com – Lawyer and Law News – Attorney General Pam Bondi’s Office joined a multi-state agreement settling allegations against Wyeth, a wholly owned subsidiary of Pfizer, Inc. The settlement resolves allegations that Wyeth knowingly underpaid rebates owed under the Medicaid Drug Rebate Program for the sales of Protonix Oral and Protonix IV. As part of the settlement, Wyeth agrees to pay a total of $784.6 million to multiple state governments and the United States. More than $371 million of this amount will go to the Medicaid Program. As part of the settlement, Florida will receive more than $9.3 million.

In 2009, Pfizer, a Delaware corporation headquartered in New York City, acquired Wyeth, Inc., a Delaware corporation headquartered in Madison, New Jersey. At all relevant times, Wyeth distributed, marketed and sold pharmaceutical products in the United States, including Protonix Oral and intravenous Protonix IV.  Protonix Oral and Protonix IV are in a class of drugs called Proton Pump Inhibitors, which inhibit the production of gastric acid.

According to allegations, Wyeth concealed, avoided or decreased its obligation to pay Medicaid Drug Rebates to states for both inhibitors. During the third quarter from 2001 to 2006, Wyeth allegedly sold Protonix Oral tablets and Protonix IV to hospitals at bundled discounted prices by linking discounts on the intravenous inhibitor to discounts on the oral inhibitor. Wyeth did not treat the sales of the two inhibitors as bundled within the meaning of the Medicaid Drug Rebate Program and therefore failed to properly allocate the discounts available under the contract.

Attorney General Bondi and several other state attorneys general, 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, negotiated the state settlements.

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  both filed in the United States District Court for the District of Massachusetts. The United States, 35 states and the District of Columbia intervened in the lawsuits.  

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