The states filed a joint motion to intervene in a pair of whistleblower lawsuits alleging Wyeth, which is now owned by Pfizer, knowingly failed to report certain discounted prices as required by laws governing the Medicaid program (see statement, lawsuit and motion to intervene). As a result, Wyeth allegedly avoided paying hundreds of millions in rebates due to state Medicaid programs for Protonix Oral and Protonix IV.
If the motion is granted, the 17 states would join 16 others and the District of Columbia, which filed a lawsuit last June alleging the same charges (see here), as did the federal government in a similar complaint in May 2009. The suits claim that, between 2000 and 2006, Wyeth offered steep discounts to thousands of hospitals nationwide for Protonix Oral and Protonix IV under a pricing arrangement known as the “Protonix Performance Agreement.”
The arrangement required hospitals to buy both drugs together under a “bundled” arrangement in exchange for a steep discount. The complaint alleges Wyeth wanted to gain access to the lucrative retail outpatient market, hoping that patients who used the intravenous version of Protonix in the hospital would later purchase Protonix Oral once discharged from a hospital.
According to the complaint, hospitals that placed both products on their formularies and attained certain market share requirements were entitled to up to a 94 percent discount off the list price of Protonix Oral and up to 80 percent off the list price of Protonix IV. Wyeth was required under the Medicaid rebate program to determine the effective prices of the bundled drugs paid by hospitals under this arrangement, and to pass along the benefit of the lower prices to the state Medicaid programs, but allegedly failed to do so.