Pfizer and Wyeth pay out US$784.6m in Medicaid scam settlement
Wyeth misconduct occurred before Pfizer acquired the firm in 2009
US pharma company Wyeth and its parent Pfizer have agreed to pay US$784.6m to the US federal and 34 state governments to resolve allegations that Wyeth failed to report to Medicaid administrators the lowest price it charged for two proton pump inhibitor (PPI) drugs.
Under the US medicine funding system, pharma companies pay rebates to state Medicaid programmes where higher charges are made elsewhere for medicines. But regarding Protonix Oral and Protonix IV, Wyeth did not report bundled sales agreements to hospitals that effectively made these drugs cheaper than their declared lowest price, saving the company millions of dollars in rebates.
Pfizer acquired New Jersey-based Wyeth in 2009, approximately three years after its subsidiary had ended this misconduct.
'As part of the settlement, Wyeth and Pfizer do not deny the government’s allegations,' said a US department of justice statement.
A US Inspector General office official said: 'Taxpayers rightly expect that large pharmaceutical companies will not falsely report prices to boost profits. Any drug company shirking those responsibilities can expect to be held accountable for its deception.'
Doug Lankler, Executive Vice President at Pfizer, said: 'We are pleased to have finalised the agreement to resolve these cases, which involve historic conduct that occurred at least 10 years ago, before we acquired Wyeth.'
