Medicaid Fraud: States Join Lawsuit against Wyeth Drug Sales
The Justice Department and sixteen states have joined in lawsuits alleging that drug giant Wyeth, defrauded the federal government out of millions of dollars. Wyeth has not been a stranger to lawsuits. Just this past November, Wyeth was at the center of a lawsuit regarding a woman’s horrific experience with the drug Phenergan. Diana Levine went to a local health care provider seeking treatment for a migraine. A physician administered Phenergan intravenously. But because the drug was improperly administered, Levine’s arm because gangrenous and ultimately had to be amputated. Levine filed suit against Wyeth arguing that the warning label did not adequately advise or address risks associated with the use of Phenergan.
However, now Wyeth has another big problem to deal with. The lawsuits filed in federal District Court in Massachusetts claim that Wyeth avoided paying hundreds of millions of dollars in rebates to state Medicaid programs for its Protonix Oral and Protonix IV acid- reflux drugs. The compliant alleges that from 2000-2008 Wyeth sold the two medicines to thousands of hospitals at a large discount in a bundled package called the Protonix Performance Agreement.
“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”, stated Tony West, assistant Attorney General for the Civil Division, in a news release. Wall Street Journal
Wyeth will likely settle this case before being acquired by Pfizer Inc. later this year.