Minnesota to collect $10.3 million in drug company settlement

Minnesota has recovered $10.3 million from a large national pharmaceutical company to settle allegations that the firm overbilled the state's Medical Assistance program for a prescription gastric drug, Attorney General Lori Swanson announced Friday.

The money comes from Wyeth, which is now part of Pfizer Inc., and stems from a national lawsuit involving the company's acid reflux medication Protonix. Swanson alleged that the company failed to provide rebates to the state equivalent to the "best price" paid by its commercial customers, as required by state law.

A nationwide settlement reached in April provides injunctive relief against Wyeth, as well as the $10.3 million payment to Minnesota, Swanson said.

"We filed this lawsuit to stop taxpayers — who fund Medical Assistance — from being overbilled," she said in a statement.

The final agreement does not include an admission of liability by Wyeth, according to a statement issued by Pfizer.

"The resolution of these claims reflects our desire to put these historic cases behind us and to focus on the needs of patients," said Doug Lankler, executive vice president and general counsel, in a statement.

In April, the U.S. Department of Justice announced that Wyeth and Pfizer agreed to pay $784.6 million to resolve allegations that Wyeth knowingly gave the government false prices on Protonix Oral and Protonix IV.

Of that settlement amount, $413 million will go to the federal government and $371 million will be shared by Minnesota and 36 other states and the District of Columbia that joined the lawsuit.

The $10.3 million payment to Minnesota represents about one and one-half times the amount that Minnesota was overcharged for the drug, according to Swanson's office.

Pfizer, which is based in New York, acquired New Jersey-based Wyeth in 2009, about three years after Wyeth had "ended the conduct that gave rise to the settlement," the Justice Department said in April.

Wyeth sold the medicines together as a "bundle" to certain hospitals at steep discounts up to 94 percent off the retail price, according to Swanson's news release. But she said the company didn't provide such discounts to the state.

Protonix belongs to a class of drugs known as proton pump inhibitors, which can help patients suppress stomach acid and treat conditions such as acid reflux and peptic ulcers.

Staff writer Glenn Howatt contributed to this report.

Christopher Snowbeck • 612-673-4744

Twitter: @chrissnowbeck