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Pfizer pays $784m to settle Protonix overcharge claims

Published on 17/02/16 at 10:04am

US drugs giant Pfizer is to pay more than $784 million to settle claims that it overcharged health insurer Medicaid for its heartburn drug Protonix (pantoprazole).

In settling, Pfizer does not admit liability, and the company pointed out in a statement that the case is still subject to a final settlement agreement and court approval. The trial was due to begin March 7 in a Boston court, before the settlement was agreed.

Protonix is a proton pump inhibitor that works by reducing the amount of acid in the stomach. Pfizer did not develop the drug, but inherited the case from previous owner Wyeth, which it bought for around $68 billion 2009 and is now a subsidiary of the company.

The US Department of Justice filed a lawsuit against Wyeth in April of the same year, claiming that between 2001 and 2006, the company failed to provide Medicaid state programs with the same discounts as it had done for non-government customers.  

Despite the large sum involved in the settlement, Pfizer may be relieved that was not hit harder. The Department of Justice had previously estimated it could cost the world’s largest drugmaker by value some $2 billion.

Pfizer expressed a desire to move on from the case, with general counsel Doug Lankler saying in a statement that “the resolution of these cases reflects a desire by the company to put these cases behind us and to focus on the needs of the patients.”  

Joel Levy

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