Pfizer makes huge multimillion-dollar Medicaid settlement

In one of the biggest drug pricing settlements in history, Pfizer is paying $784.6 million to settle claims alleging that the practices of its Wyeth subsidiary relating to the calculation of Medicaid rebates for Protonix (pantoprazole sodium) violated the Federal Civil False Claims Act and other laws.

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The Department of Justice had claimed that, between 2001 and 2006, Wyeth did not give state Medicaid programs the same discounts for its heartburn drug, Protonix, that it did for non-government customers.

In a similar settlement, AstraZeneca and Teva Pharmaceutical's Cephalon unit paid more than $50 million to settle allegations that they underpaid rebates owed to state Medicaid programs. The settlement stemmed from a lawsuit filed by a pharmacist and attorney, who claimed that the 2 pharmaceutical manufacturers intentionally lowered rebates they owed to Medicaid.

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Meanwhile, the Pfizer settlement fully resolves pending legal cases in Federal District Court for the District of Massachusetts.

“We are pleased to have reached an agreement in principle to resolve these cases, which involve historic conduct that occurred at least 10 years ago, before Pfizer acquired Wyeth,” said Doug Lankler, Pfizer’s executive VP and general counsel. “The resolution of these cases reflects a desire by the company to put these cases behind us and to focus on the needs of patients.”

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