Pfizer unit to pay $784.6 million in Medicaid refund settlement
Feb 17, 2016 05:42 AM EST
Pfizer recently announced that its Wyeth unit has already agreed to pay $784.6 million. This will allegedly settle claims that the company's calculation of the Medicaid rebates for Protonix between 2001 and 2006 violated the Federal Civil False Claims Act and other laws.
According to Reuters, Pfizer Inc. said that its Wyeth unit has already agreed to shell off $784.6 million to settle cases related to the calculation of the Medicaid rebates for a gastric drug between 2001 and 2006. The claims accused that Wyeth's calculation of rebates for Protonix violated the Federal Civil False Claims Act and other laws before the company was bought by Pfizer.
A coalition of 15 U.S. states filed a complaint in a federal court in Massachusetts in 2009. It complaint claimed that Wyeth failed to offer state Medicaid programs the same rebates it gave private hospitals.
CNBC mentioned that Medicaid is the joint federal-state health care program for the poor. But then Pfizer bought Wyeth for $68 billion in 2009 to soften the blow of losing the patent on cholesterol-lowering Lipitor.
Wyeth has previously settled charges regarding the illegal marketing of its kidney drug Rapamune. Pfizer also reissued its results for the fourth quarter and the full year to reflect this charge. The company's adjusted earnings will not be affected by the charge.
Pfizer, additionally, noted that the agreement in principle, which does not include an admission of liability by Wyeth, is expected to fully resolve cases pending in Federal District Court for the District of Massachusetts. Doug Lankler, general counsel for Pfizer, mentioned in a statement via Street Insider that "the resolution of these cases reflects a desire by the company to put these cases behind us."
For now, as a result of the agreement in principle, Pfizer is reissuing its financial results prepared in accordance with U.S. generally accepted accounting principles for the fourth quarter and full year of 2015. And earlier this month, Pfizer reported a fourth-quarter profit of $613 million.