Attorney General Peter F. Kilmartin announced that today his office sent $2,442,794.84 to the State's Executive Office of Health and Human Services for the Medicaid budget as part of a settlement reached with Wyeth, a wholly owned subsidiary of Pfizer, Inc., to resolve allegations that Wyeth knowingly underpaid rebates owed under the Medicaid Drug Rebate Program for the sales of Protonix Oral and Protonix IV between 2001 and 2006.
The funds represent the State's portion of the total state/federal Rhode Island settlement, which was $5.4 million.
The settlement stems from two whistleblower lawsuits, U.S., al., ex rel. Kieff v. Wyeth Pharmaceuticals, Inc., Civ. No. 03-cv-12366, and U.S., et al., ex rel. William St. John LaCorte v. Wyeth, Civ. No. 06-cv-11724, which were filed in the United States District Court for the District of Massachusetts. Rhode Island intervened in the lawsuits.
"This is a huge windfall for the State's Medicaid budget and another example of the work our Medicaid Fraud Control and Patient Abuse Unit does to ensure that each Medicaid dollar is spent as it was intended," said Attorney General Kilmartin. "As the State continues to look for ways to contain increasing Medicaid costs while maintaining the same level of quality services to the populations it serves, this settlement adds significant non-taxpayer dollars to the bottom line."
The Medicaid Prescription Drug Rebate Program was enacted by Congress in 1990 as a cost containment measure for Medicaid's payment for outpatient drugs. The Medicaid Drug Rebate Program requires participating pharmaceutical manufacturers to pay quarterly rebates to State Medicaid programs for each of its drugs sold to pharmacies that were reimbursed by Medicaid. The quarterly rebate was determined from each pharmaceutical manufacturer's reported "Best Price," or the lowest price for which it sold a covered drug in a particular quarter.
The Medicaid Fraud Control and Patient Abuse Unit enforces the laws pertaining to fraud in Rhode Island's Medicaid program and prosecutes cases of abuse, neglect, or mistreatment of patients in all state healthcare facilities. The Unit prosecutes criminal activity, pursues civil remedies where appropriate, and participates with federal and state authorities in a variety of inter-agency investigations and administrative proceedings. In addition, the Unit works closely with federal and state authorities to investigate pharmaceutical companies that overbill and defraud the State's Medicaid program.