Vermont Business Magazine Pharmaceutical manufacturer Wyeth, Inc, a wholly owned subsidiary of Pfizer, Inc, has paid $6,029,003.35 to Vermont to resolve allegations that it knowingly underpaid drug rebates to the Vermont Medicaid Program. The payment is part of a joint multistate and federal settlement totaling $784.6 million. The settlement primarily reimburses the Medicaid Program for the overpayments made to Wyeth, but also included nearly $900,000 in civil penalties and additional recoveries.
The settlement resolves claims that Wyeth knowingly engaged in a scheme to reduce the amount of rebates it was required to pay to state Medicaid programs between 2001 and 2006 for the sales of its products Protonix Oral and Protonix IV. The drugs are in a class of drugs called Proton Pump Inhibitors that are used to treat symptoms of acid reflux.
Under the Medicaid Prescription Drug Rebate Program, participating pharmaceutical manufacturers are required to pay quarterly rebates to state Medicaid programs for drugs sold to pharmacies and subsequently paid for by Medicaid. The amount of the quarterly rebate is based in part upon the manufacturer’s reported “best price,” the lowest retail price available for the drug in a particular calendar quarter.
The government plaintiffs alleged that Wyeth falsely reported its best prices, resulting in a substantial reduction of the rebate amounts it paid to the state Medicaid programs.
The investigation of the allegations began after two whistleblower lawsuits were filed in the US District Court for the District of Massachusetts. The United States, Vermont and 34 other states intervened in the lawsuits in 2009. Vermont’s involvement in the case was handled by the Medicaid Fraud & Residential Abuse Unit of the Vermont Attorney General’s Office.
Source: Vermont AG 7.6.2016