Qui Tam

Federal Government Joins 16 States in Wyeth Whistleblower Lawsuit

By Brian F. LaBovick

New Jersey-based Wyeth, one of the nation's largest drug manufacturing companies recently had two qui tam lawsuits filed against them in federal court in Massachusetts. Pharma giant,  Wyeth - poised to be bought out by large pharmaceutical company Pfizer, Inc. later this year - is being accused of overcharging state Medicaid programs by failing to offer them the best price possible for the stomach acid drug Protonix. Sixteen states - as well as the Justice Department - have joined in on the lawsuits, which could result in millions of dollars in repayments to Medicaid, as well as settlements for the two whistleblowers.

The lawsuits allege that between the years 2000 and 2006, Wyeth offered very high discounts to hospitals around the country for Protonix, which is available in oral and injected forms. While these hospitals were able to take advantage of the deal for the brand name drug, the same deal was not offered to state Medicaid programs. Federal law mandates that the manufacturers of brand name prescription drugs must offer the same deal - or the "best price" - of the drugs they make to Medicaid programs and private hospitals alike.

According to to the DOJ, Tony West, Assistant Attorney General for the Justice Department's Civil Division stated,

'Our complaint charges that Wyeth created the Protonix bundle so they could increase their market share at the expense of the Medicaid program -- a program to provide the least advantaged Americans with necessary medical care and services. 'By offering massive discounts to hospitals, but then hiding that information from the Medicaid program, we believe Wyeth caused Medicaid programs throughout the country to pay much more for these drugs than they should have.'

By failing to offer Medicaid programs the best price for Protonix, it is alleged that Wyeth avoided paying hundreds of millions of dollars in rebates. The presence of two whistleblowers in the two lawsuits suggests that people with insider knowledge into the goings-on at Wyeth have evidence that will be presented in court during these suits. As with other past whistleblower cases, these individuals have likely already disclosed a great deal of damaging information to the government regarding Wyeth's alleged practices.

Additionally, the lawsuits against Wyeth allege that the drug manufacturer bundled oral and intravenous versions of Protonix together in the hopes of making additional profits through outpatient sales. When combined with the rebate allegations being leveraged against the pharmaceutical company, these additional accusations of underhanded marketing tactics make this a case that is sure to be followed with great interest by watchdog groups around the country.

As expected, representatives for Wyeth have defended their methods. Spokesperson Doug Petkus issued a statement saying that Wyeth stands behind its pricing. However, if Wyeth is found guilty of defrauding Medicaid - a state program that aids poor citizens in their medical coverage - it could face steep fines as well as be held responsible for restitution. On top of that, Wyeth would likely have to pay damages to the two whistleblowers involved in the suits.

In addition to the Justice Department, 16 states have joined in the two lawsuits filed in Massachusetts. The states are: Florida, Delaware, California, Indiana, Illinois, New York, Massachusetts, Louisiana, Michigan, New Hampshire, Nevada, Tennessee, Virginia, Wisconsin, Texas and Washington, DC.
 

Full post as published by Whistleblower Law Blog on June 09, 2009 (boomark / email).