DOJ Announces $785 Million False Claims Act Settlement with Wyeth and Pfizer.
Date posted: May 3, 2016
The Department of Justice (DOJ) recently announced that drug companies Wyeth and Pfizer agreed to pay nearly $785 million to settle alleged False Claims Act (FCA) violations. Pfizer, one of the world’s largest and most recognizable pharmaceutical companies, acquired Wyeth in 2009. Wyeth allegedly reported false and fraudulent prices by failing to report discounts on Protonix IV and Protonix Oral, two proton pump inhibitor (PPI) drugs used to treat acid reflux. Medicaid requires pharmaceutical companies to report the best prices offered to customers for name brand drugs. Medicaid utilizes prices reported by drug companies to determine rebates for state Medicaid programs, thereby allowing Medicaid to receive the same discounts as other large customers.
From 2001 to 2006, Wyeth allegedly bundled sales of both PPIs to hospitals and concealed the bundled discounts from Medicaid. The bundled sales arrangements allowed Wyeth to avoid hundreds of millions of dollars in rebates and to unlawfully boost profits. Consequently, Wyeth will pay approximately $413 million to the federal government and $371 million to state Medicaid programs. The case originated as a 2009 whistleblower lawsuit filed under the qui tam provisions of the FCA, with the relators receiving over $98 million. The settlement is a product of the efforts of the Health Care Fraud Prevention and Enforcement Action Team.
The DOJ Justice News article is available at:
United States Department of Justice. “Wyeth and Pfizer Agree to Pay $784.6 Million to Resolve Lawsuit Alleging That Wyeth Underpaid Drug Rebates to Medicaid.” Justice News. 27 Apr. 2016.