Pfizer Agrees to $785M Settlement in Drug Discount Case

[Eugene]

Source: Associated Press

Drugmaker Pfizer Inc. has agreed to pay nearly $785 million to resolve allegations that one of its companies failed to give Medicaid the same discounts it provided to private purchasers of a heartburn treatment, federal prosecutors announced Wednesday.

The tentative deal that resolves allegations filed by two whistleblowers was first announced in February, but final approval was announced Wednesday by the U.S. attorney's office in Boston.

The case involved alleged conduct by Wyeth before New York-based Pfizer acquired the company in 2009.

Wyeth gave thousands of hospitals deep discounts on two versions of the heartburn and acid reflux prescription Protonix between 2001 and 2006, but failed to report those prices to the government as required by law so Medicaid can receive the same discounts, prosecutors said.

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Read more: http://abcnews.go.com/US/wireStory/pfizer-agrees-785m-settlement-drug-discount-case-38709480

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By THE ASSOCIATED PRESS
BOSTON — Apr 27, 2016, 2:03 PM ET

[QC]

1. Don't worry, folks--settlements are tax-deductible. n/t

[lsewpershad]

2. When

Are some these greedy people going to be put in prison for breaking the law. Sure looks like rich and powerful just have to pay their way out of prison.

[nitpicker]

3. From the DoJ PR

https://www.justice.gov/opa/pr/wyeth-and-pfizer-agree-pay-7846-million-resolve-lawsuit-alleging-wyeth-underpaid-drug-rebates

The Department of Justice announced today that pharmaceutical companies Wyeth and Pfizer Inc. have agreed to pay $784.6 million to resolve allegations that Wyeth knowingly reported to the government false and fraudulent prices on two of its proton pump inhibitor (PPI) drugs, Protonix Oral and Protonix IV. Pfizer, which is headquartered in New York City, acquired New Jersey-based Wyeth in 2009, approximately three years after Wyeth had ended the conduct that gave rise to the settlement.
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PPI drugs are used to treat symptoms of, among other things, acid reflux. In a complaint filed in 2009, the government alleged that Wyeth failed to report deep discounts on Protonix Oral and Protonix IV that it made available to thousands of hospitals nationwide. As part of the settlement, Wyeth and Pfizer do not deny the government’s allegations.

According to the government’s complaint, Wyeth sold Protonix Oral and Protonix IV through a bundled sales arrangement in which a hospital could earn deep discounts on both drugs if it placed them on formulary and made them “available” within the hospital. Through this bundled arrangement, Wyeth sought to induce hospitals to buy and use Protonix Oral, which hospitals otherwise would have had little incentive to use, because other pre-existing oral PPI drugs were priced competitively and were considered to be as safe and effective. Wyeth wanted to control the hospital market because patients discharged from the hospital on Protonix Oral were likely to stay on the drug for long periods of time, rather than switch to competing PPIs, during which time payers, including Medicaid, would pay nearly full price for the drug.
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The government alleged that Wyeth hid from Medicaid the bundled discounts Wyeth gave to hospitals on Protonix Oral and Protonix IV. As a result, Wyeth wrongfully avoided paying hundreds of millions of dollars in rebates to Medicaid during the period from 2001 to 2006. Under the terms of today’s settlement, Wyeth will pay $413,248,820 to the federal government and $371,351,180 to state Medicaid programs.
(snip)

The settlement resolves allegations filed under the False Claims Act by Lauren Kieff, a former hospital sales representative for the pharmaceutical company AstraZeneca Pharmaceuticals, LP, and William St. John LaCorte, a physician practicing in New Orleans, Louisiana. Under the False Claims Act, private parties may sue on behalf of the government for false claims for government funds and to receive a share of any recovery. The relator share in this case will be $98,058,190 and will be paid from the proceeds of the federal and state settlements.
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