Pfizer, Wyeth to Pay North Carolina $45 Million as Part of Medicaid Fraud Settlement

Wyeth, now a subsidiary of Pfizer, is charged with misreporting sale prices and underpaying drug rebates as required by the Medicaid program

Pfizer, Wyeth to Pay North Carolina $45 Million as Part of Medicaid Fraud Settlement
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April 29, 2016

North Carolina will be receiving more than $45 million as part of a settlement between 35 states, the federal government, and drug makers Wyeth and Pfizer for their roles in Medicaid fraud.

In total, the pharmaceutical companies will pay $785.6 million to states and to the federal government for underpaying rebates to Medicaid programs for heartburn and acid reflux medications.

According to a release from the North Carolina Attorney General's Office, drug makers are required to report to Medicaid the lowest price they charge commercial customers for their drugs and to pay quarterly rebates to Medicaid based on those reported prices.

Wyeth, now a subsidiary of Pfizer, was accused of encouraging hospitals to purchase Protonix Oral tablets by selling the drug in a discounted bundle with Protonix IV. Between 2001 and 2006, Wyeth also allegedly failed to report the discounted sale price to the Medicaid Drug Rebate Program and avoided paying millions of dollars in drug rebates.

"Cheating Medicaid wastes tax dollars and harms health care for patients in need," said North Carolina Attorney General Roy Cooper. "Our attorneys and investigators will continue to hold drug companies accountable when they flout the law."

The settlement stems from two different whistleblower lawsuits filed in the United States District Court for the District of Massachusetts by Lauren Kieff, a former pharmaceutical sales representative, and William St. John LaCorte, a physician. North Carolina, 34 other states, the District of Columbia and the federal government intervened in the lawsuits.

Because Medicaid is jointly funded by federal and state governments, more than $413 million of the $786 million national settlement will be paid to the United States. North Carolina will receive about $45.34 million.