Pfizer in $785 million settlement over Protonix rebates

US pharma giant Pfizer (NYSE: PFE) revealed today that its Wyeth subsidiary has reached an agreement in principle to resolve claims alleging that Wyeth’s practices relating to the calculation of Medicaid rebates for its heartburn drug Protonix (pantoprazole sodium) between 2001 and 2006, several years before Pfizer acquired Wyeth in 2009, violated the Federal Civil False Claims Act and other laws.

When finalized, the agreement in principle is expected to fully resolve cases pending in Federal District Court for the District of Massachusetts before the Judge Douglas Woodlock. Pfizer also paid $55 million a few years ago to resolve allegations that Wyeth promoted Protonix for uses that were not approved by the Food and Drug Administration (The Pharma Letter December 13, 2012).

Under the agreement in principle, Wyeth will make a payment of $784.6 million to resolve these claims. The agreement in principle does not include an admission of liability by Wyeth. The resolution is subject to the negotiation of final settlement agreements and court approval.