Settlement Reached to Resolve Rebate Program Reimbursements

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April 29, 2016

LITTLE ROCK – Arkansas Attorney General Leslie Rutledge has reached a settlement agreement with Wyeth, a Delaware pharmaceutical corporation with its headquarters in Madison, New Jersey. Wyeth is a subsidiary of Pfizer Inc. Wyeth and Pfizer have agreed to pay a total $784.6 million to the federal and the individual states’ Medicaid programs.

Rutledge joined 34 other states and the District of Columbia in resolving 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.

“Arkansas’s Medicaid Program and the Medicaid Program Trust Fund will receive over $3 million from the multi-state settlement,” said Attorney General Rutledge. “The unacceptable actions of this pharmaceutical company put additional financial stress on the Medicaid program by not providing the agreed upon ‘best price’ rebate.”

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 settlement stems from two whistleblower lawsuits, U.S., al., ex rel. Kieff v. Wyeth Pharmaceuticals, Inc. and U.S., et al., ex rel. William St. John LaCorte v. Wyeth, which were filed in the U.S. District Court for the District of Massachusetts. The lawsuits alleged that Wyeth bundled medications but failed to properly report the sales to the Medicaid Drug Rebate Program, therefore underpaid Medicaid Drug Rebates for the two medications.

The state settlements were negotiated by attorneys general in Indiana, Massachusetts, New York and North Carolina, working with the U.S. Attorney’s Office for the District of Massachusetts, the U.S. Department of Health and Human Services Office of Inspector General, and the U.S. Department of Justice.

About Attorney General Leslie Rutledge

Leslie Carol Rutledge is the 56th Attorney General of Arkansas. She is the first woman and first Republican in Arkansas history to be elected to the office. Since taking office, she has begun a Mobile Office program, a Military and Veterans Initiative, a Metal Theft Prevention program and a Cooperative Disability Investigations program. She has led efforts to teach Internet safety, combat domestic violence and make the office the top law firm for Arkansans. Rutledge also re-established and co-chairs the National Association of Attorneys General Committee on Agriculture.

A native of Batesville, she is a graduate of the University of Arkansas and the University of Arkansas at Little Rock William H. Bowen School of Law. Rutledge clerked for the Arkansas Court of Appeals, was Deputy Counsel for Gov. Mike Huckabee, served as a Deputy Prosecuting Attorney in Lonoke County and subsequently was an Attorney at the Department of Human Services before serving as Counsel at the Republican National Committee. Rutledge lives in Little Rock, and her husband, Boyce, has a farm in Crittenden County.