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New York State Gets $55 Million As Big Pharma Settles Medicaid Case

Pfizer, based in New York City and the parent company of Wyeth, will have to fork over $784.6 million to the federal and 35 state governments as part of its settlement of a Medicaid rebate cheating case.
Pfizer, based in New York City and the parent company of Wyeth, will have to fork over $784.6 million to the federal and 35 state governments as part of its settlement of a Medicaid rebate cheating case. Photo Credit: Wikimedia

New York State will get a big chunk of a settlement reached between the federal government and pharmaceutical giant Pfizer, according to a statement by state Attorney General Eric Schneiderman.

Schneiderman announced Wednesday that the agreement means that Pfizer, and its subsidiary, Wyeth, will have to fork over a total of $784.6 million for underpaying Medicaid drug rebates to 35 states and the federal government.

About $94 million of that will resolve claims relating to New York’s Medicaid program, with the state getting a $55.6 million slice of the pie and the federal government, about $38 million, Schneiderman said.

Because the Medicaid program is jointly funded by the federal government and states, Pfizer will pay in excess of $413 million of the $784.6 million to the United States. The states will split $371 million of the settlement, Schneiderman said.

According to the attorney general, Wyeth knowingly underpaid rebates for the sales of Protonix Oral and Protonix IV between 2001 and 2006.

Protonix, the brand name for pantoprazole, is a proton pump inhibitor designed to decrease stomach acid.

Although the alleged underpayment were made by the New Jersey-based Wyeth before it was acquired by Pfizer in 2009, the parent company is still responsible, Schneiderman said in his statement.

“Pharmaceutical companies cannot dodge their obligations to the Medicaid Program -- they must be held accountable and play by the rules,” he said.

Schneiderman added that his office would continue to work to ensure that pharmaceutical companies “report accurate prices and pay what they owe to the Medicaid Program.”

Pfizer, also a Delaware company, is headquartered in New York City.

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