Pfizer reported Tuesday that its Wyeth unit agreed to pay $784.6 million to settle claims that the company's calculation of Medicaid rebates for Protonix (pantoprazole) between 2001 and 2006 violated the Federal Civil False Claims Act and other laws. Pfizer 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.
In the case, in which the US Department of Justice joined  a whistleblower lawsuit against Wyeth in 2009, the drugmaker was accused of failing to provide state Medicaid programmes with the same discounts that were afforded to certain non-governmental customers, in violation of federal law. The Department of Justice estimated that as a consequence, Wyeth avoided paying hundreds of millions of dollars in rebates to Medicaid programmes.
Doug Lankler, general counsel for Pfizer, said "we are pleased to have reached an agreement in principle to resolve these cases." Lankler continued "the resolution of these cases reflects a desire by the company to put these cases behind us." A trial in the case had been scheduled to begin March 7.
Pfizer, which acquired  Wyeth in 2009 for $68 billion, revised its fourth-quarter earnings  to reflect a loss of $172 million as a result of the settlement. Previously, the company posted a profit of $613 million for the three-month period.