Wyeth agrees to pay $794.6 million to settle drug pricing whistleblower case

Pfizer has reported that its subsidiary Wyeth has agreed to settle claims of the Government and whistleblowers that its methods of calculating Medicaid rebates for its drug Protonix violated law. Wyeth has agreed in principal to pay $784.6 million in order to settle.

Protonix is an acid suppressant drug. According to the Amended Complaint of the Government, in order for drug manufacturers to be eligible for payment under the Medicaid program, which provides prescription drug coverage to the nation’s poor and disabled, the manufacturers must offer the drug at its lowest best price.

Wyeth ignored the Best Price requirement, the Complaint states, effectively over-charging Medicare in the amount of millions of dollars.  It is estimated that Pfizer stood to lose more than $5 billion had the case gone to trial in early March as scheduled.

The whistleblowers in the case, Lauren Kieff of Massachusetts and William LaCorte of Louisiana stand to make up to $236 million for revealing the wrongdoing to the Government.

Jeffrey Newman represents whistleblowers. He does not represent the individual whistleblowers in this case.