Pfizer fraud. (Names in the News).
Tuesday, October 1 2002
PFIZER CORPORATION AND ITS SUBSIDIARIES, Warner-Lambert and Parke-Davis, will pay $49 million to settle allegations that the company ripped off Medicaid.
The government alleged in a False Claims Act suit that Pfizer fraudulently avoided paying the full rebates owed to the state and federal governments for the cholesterol-lowering drug Lipitor. Medicaid rules require each drug company participating in the program to agree to give the government the best price they offered to any commercial, for-profit customer and pay a quarterly rebate based, in part, upon that best price.
Parke-Davis Labs, then a subsidiary of Warner-Lambert, which was subsequently acquired by Pfizer in 2000, allegedly overstated the Lipitor best price in the first and second quarters of 1999 by concealing $250,000 of cash discounts that were given to a key managed care customer in Louisiana in exchange for favorable status on the managed care organization's drug formulary.
The alleged unreported discounts to the managed care organization allowed Parke-Davis/Warner-Lambert to retain over $20 million owed to the Medicaid program.
David Foster, a former Parke-Davis/Warner-Lambert employee in the company's Southeast Region, was the quitam relator or whistle blower who filed the initial suit on behalf of the United States. Foster will receive 21.3 percent of the federal government's portion of the recovery or $5,945,958.90.
