Wyeth Accused of Ripping off Medicaid

Wyeth, one of the world’s largest drug companies, overcharged state Medicaid health plans hundreds of millions of dollars by charging full price for drugs that should have been offered at a discount, according to two newly filed whistleblower lawsuits.

According to the Justice Department and the attorneys general of 16 states, Wyeth offered discounts to hospitals for Protonix, a drug for the suppression of stomach acid. However, the drug company offered no such deal to Medicaid, in violation of a federal law requiring makers of brand-name drugs to offer the same rebates to state Medicaid programs as are offered to other buyers, prosecutors said.

By charging Medicaid full price for two versions of Protonix, Wyeth earned hundreds of millions of dollars it should have paid back in rebates to Medicaid, the Justice Department said.

The charges against Wyeth were exposed in whistleblower lawsuits, which serve to protect the government from fraud in business dealings and other areas. Whistleblower suits filed under qui tam laws allow citizens to file lawsuits on behalf of the government then share in the proceeds of savings. The whistleblower suits the government and states have now agreed to join originally were filed in Massachusetts, officials said.

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