Pfizer has agreed to pay $784.6 million to settle claims that it overcharged Medicaid for its heartburn medicine Protonix. The agreement marks one of the biggest settlements to date from drugmakers facing similar allegations, according to FiercePharma.
In the case, in which the US Department of Justice joined a whistleblower lawsuit against Wyeth in 2009, the drugmaker was accused of failing to provide state Medicaid programs with the same discounts that were afforded to certain non-governmental customers, in violation of federal law. The Department of Justice estimated that as a consequence, Wyeth avoided paying hundreds of millions of dollars in rebates to Medicaid programs.
A physician and a former AstraZeneca sales rep filed the two earlier whistleblower suits against Wyeth, according to a Wall Street Journal story. The U.S. False Claims Act allows individuals to file suits accusing companies or individuals of defrauding the government, and potentially get some money back for doing so.
The settlement “does not include an admission of liability” by Pfizer, and it is still subject to a final settlement agreement and court approval, the company said in a statement. But the agreement does mark the end of a long chapter for Pfizer, which inherited the case after buying Wyeth in 2009.
Pfizer, the largest U.S.-based drugmaker, said it is charging the payment to its fourth-quarter results, which it restated on Tuesday. That left the New York-based company with a loss of $172 million, or 3 cents per share, in the last quarter, compared with a net profit of $613 million, or 10 cents per share, initially reported on Feb. 2.