WASHINGTON, May 18 (UPI) -- The United States and 16 states joined two suits against drug firm Wyeth, charging it didn't give Medicaid the same drug discount it did private programs.
Because the company allegedly didn't provide the same discounts, Wyeth allegedly avoided paying hundreds of millions in rebates due state Medicaid programs for two drugs used to suppress stomach acid, the U.S. Justice Department said Monday in a news release.
Under the Medicaid Drug Rebate Program, drug manufacturers must report to the government prices they charge customers, including the best price offered, the department said. They also must pay rebates to state Medicaid programs calculated on any discounted prices offered.
Under a pricing agreement between 2000 and 2006, Wyeth offered discounts to hospitals nationwide for Protonix Oral and Protonix IV. The two whistleblower suits said even though Wyeth was required to determine the effective prices paid by hospitals and pass along the lowest prices to state Medicaid programs, the drug giant allegedly failed to do so, avoiding paying hundreds of millions of dollars to Medicaid in quarterly rebates, department officials said.
"Our complaint charges that Wyeth created the Protonix bundle so they could increase their market share at the expense of the Medicaid program," said Tony West, assistant attorney general for the Civil Division. "(We) believe Wyeth caused Medicaid programs throughout the country to pay much more for these drugs than they should have."
The two False Claims Act suits were filed against Wyeth in Massachusetts.
