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Pfizer settles US Protonix lawsuit for $785m

US government deal covers Wyeth’s failure to pay drug rebates

Pfizer

After years of legal wrangling, Pfizer has finally agreed to pay $785m to settle a lawsuit claiming its Wyeth unit failed to pay rebates due to the US government on gastrointestinal drug Protonix.

The case dates back to April 2009 - at around the time Pfizer acquired Wyeth - when the Department of Justice and a coalition of states filed a suit alleging that Wyeth had over-charged Medicaid for Protonix (pantoprazole), failing to offer the federal government the same discounts it was offering to private customers.

Under US law Medicaid - which supports healthcare provision for people with lower incomes - should get the best possible price on offer for any drug purchased under the scheme, with any overspend due in the form of a rebate.

The suit claimed this had not occurred between 2001 and 2006, as Protonix was building towards its peak annual sales point of $1.9bn in 2007, and had denied the federal and state governments of hundreds of millions of dollars.

There had been speculation that Pfizer could have been at risk of a $2bn-plus penalty if the case went to trial and was not found in the drugmaker's favour. Analysts welcomed the settlement as it removes a distraction for the company's management board as it handles the integration of Hospira, recently acquired for $17bn.

The settlement fee is also significantly less than the $2.15bn payout Pfizer and Protonix partner Takeda won from Teva and Sun Pharma in 2013 to settle a patent infringement lawsuit related to the launch of a generic version of the drug.

Meanwhile, the agreement in principle does not include any admission of liability by Wyeth, according to Pfizer, which said the settlement is still subject to final agreements and court approval.

Doug Lankler, Pfizer's general counsel, said: "We are pleased to have reached an agreement in principle to resolve these cases, which involve historic conduct that occurred at least 10 years ago, before Pfizer acquired Wyeth.

"The resolution of these cases reflects a desire by the company to put these cases behind us and to focus on the needs of patients."

Article by
Phil Taylor

18th February 2016

From: Sales

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