A Massachusetts whistleblower will share a $98 million payout in a large settlement federal prosecutors reached with Pfizer Inc. and its Wyeth Pharmaceuticals unit for overcharging Medicaid for drugs.
Under terms of the settlement, finalized Wednesday, Lauren Kieff, a pharmaceutical sales representative, and a second whistleblower from Louisiana will share the payment. Wyeth, owned by New York-based Pfizer, in February agreed to settle the case for $785 million.
According to US Attorney Carmen Ortiz, Wyeth failed to provide the goverment Medicaid program the same discounts on certain drugs that it gave to hospitals. Wyeth provided “deep discounts” on a reflux drug to local hospitals, including Massachusetts General and Brigham and Women’s, that it did not extend to the government insurance program for low-income patients.
As a result, Wyeth avoided paying hundreds of millions of dollars in rebates to Medicaid from 2001 to 2006, according to Ortiz’s office.
“We are pleased to have finalized the agreement to resolve these cases, which involve historic conduct that occurred at least 10 years ago, before we acquired Wyeth,” Doug Lankler, Pfizer’s general counsel, said in a statement.
As part of the settlement, Wyeth and Pfizer did not deny the government’s allegations. Pfizer acquired Wyeth in 2009.