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Maine and 16 Other States Move to Join Suits Against Pharmaceutical Giant Wyeth
May 11, 2010
For Immediate Release
MAINE AND 16 OTHER STATES MOVE TO JOIN SUITS AGAINST PHARMACEUTICAL GIANT WYETH Drug Company Allegedly Failed to Pay Hundreds of Millions In Rebates to Medicaid Programs Across the Country
Contact: Kate Simmons (207) 626-8577
Augusta- Maine and sixteen other states filed a joint motion for leave to intervene in two whistleblower lawsuits against the drug manufacturer Wyeth alleging that the company knowingly failed to report certain discounted prices of its drugs as required by Medicaid program laws. As a result, Wyeth allegedly avoided paying hundreds of millions in rebates to state Medicaid programs for its drugs, Protonix Oral and Protonix IV. These drugs are proton pump inhibitors (PPI) and are used to suppress stomach acid.
Under the Medicaid Drug Rebate Program, drug manufacturers are required to report to the government certain prices they charge their customers, including the “best price” offered for their drugs. They also are required to pay rebates to the state Medicaid programs which are calculated based on the reported discounted prices offered to other customers. Congress created the Medicaid Drug Rebate Program to ensure that Medicaid, the nation’s provider of health insurance to the poor and the disabled and one of the largest purchasers of drugs in the country, receives the same discounts offered to other large commercial customers in the marketplace.
Between 2001 and 2006, Wyeth offered steep discounts to thousands of hospitals nationwide for Protonix Oral and Protonix IV under pricing arrangements known as “Protonix Performance Agreements.” These agreements offered discounted prices based on certain conditions, such as market share or placement on formularies. The States allege that Wyeth was required under the Medicaid Drug Rebate Program to report these prices paid by hospitals under this arrangement, and to pass along the benefit of the lower prices to the state Medicaid programs. Wyeth allegedly failed to do so and avoided paying hundreds of millions of dollars to Medicaid in rebates.
“In order to provide Protonix Oral and Protonix IV to the Medicaid program, Wyeth was legally required to report their best price for these drugs,” stated Attorney General Mills. “This action is intended to enforce this requirement and ensure that Maine’s Medicaid program is getting the same discounts for drugs that are provided to other large drug purchasers. Every dollar inappropriately retained by Wyeth for these drugs should instead have been available to provide services to Maine’s most vulnerable.”
The case is being handled by the Maine Office of Attorney General, Healthcare Crimes Unit. Last year, the United States and 16 other named plaintiff states intervened in these two whistleblower lawsuits now pending in the United States District Court for Massachusetts. By intervening in the suits, Maine seeks damages from Wyeth on behalf of its Medicaid program known as MaineCare.