NEVER FORGET: Pfizer paid almost $785M settlement in 2016 due to overcharging Medicaid for heartburn drug
01/31/2023 // Ramon Tomey // Views

Back in 2016, pharmaceutical giant Pfizer paid out a $784.6 million settlement to resolve allegations that it overcharged Medicaid for the price of its heartburn drug Protonix.

According to a February 2016 piece in the Whistleblower News Review, the allegations were a legacy suit Pfizer inherited from the drug manufacturer Wyeth, which the New York-based company acquired in 2009. Based on a lawsuit filed by the Department of Justice (DOJ) in the same year that Pfizer bought Wyeth, the subsidiary allegedly provided discounts on Protonix to non-government hospitals while charging Medicaid full price for the drug.

Pharmaceutical companies must comply with the "best price requirement" indicated in False Claims Acts (FCA) for both the federal and state levels. This means that drug firms "are required to offer their lowest prices to Medicare, Medicaid and other such programs." Thus, the Justice Department accused Wyeth of violating federal law by overcharging federally funded healthcare programs for prescription drugs.

The case against Wyeth, and subsequently against Pfizer, was the product of two earlier suits filed by Louisiana physician Dr. William LaCorte and former sales representative Lauren Kieff. LaCorte discovered Wyeth's fraudulent pricing scheme via his New Orleans hospital. Meanwhile, Kieff caught wind of the scheme by speaking with hospital pharmacists.

According to the DOJ, the total losses in taxpayer dollars could be in excess of $2 billion.

This was not the first time the Pfizer subsidiary got in trouble before the law. In December 2012, the pharmaceutical giant paid a $55 million to settle claims that Wyeth marketed Potonix – which acts to repair damage to the lining of the esophagus caused by acid reflux – for off-label uses not approved by the Food and Drug Administration. (Related: Prilosec, Nexium, Protonix and Zegerid found to increase DEATH by 25%.)


Mahany: Whistleblowers standing up to Big Pharma's greed

Whistleblowers such as LaCorte and Kieff "provide a valuable public service by standing up to corporate greed," according to whistleblower attorney Brian Mahany. He added that the actions of the two "will save taxpayers millions of dollars and help ensure that medical decisions are based on patient need, not on who is offering the biggest rebate."

Because of their assistance in exposing the scheme, both LaCorte and Kieff would receive a whistleblower award of almost $59 million. The Louisiana doctor is no stranger to exposing fraudulent pharmaceutical schemes, as he previously collected $38 million in reward money after filing several lawsuits. LaCorte had a role in the 2008 Merck settlement amounting to $250 million regarding its heartburn medication Pepcid.

Those willing to bring fraudulent activities to light can collect up to 30 percent of the amount collected by the government. In 2015 alone, Washington recovered $2.8 billion through FCA lawsuits filed by whistleblowers – with $597 million being allocated to individuals who shed light on pharmaceutical corruption.

"Most whistleblower cases arise from information provided by insiders," explained Mahany. "This case makes it clear that equally valuable inside information can come from outside as well."

The prominent whistleblower lawyer ultimately denounced the "shocking" conduct of Big Pharma.

"This case against Pfizer is not an isolated incident. The big drug companies have been fined billions of dollars in recent years, yet they still can't clean up their act. Unfortunately, Pfizer looks at the $785 million fine as a small cost of doing business instead of a deterrent."

Watch Gabor "Gabe" Zolna discuss Pfizer being fined more than $4.7 billion for FCA violations since 2000.

This video is from the channel on

More related stories:

HISTORY OF FRAUD: Pfizer agreed to pay $49 million settlement in 2002 over Lipitor price gouging.

HISTORY REPEATS: Pfizer paid out $1.2B after its drug caused thousands of BREAST CANCER cases.

CRIME CARTEL: Pfizer paid out $2.3 billion in a settlement to Washington for illegally promoting its drugs.

NEVER FORGET: In 1994, Pfizer paid $20 million after LYING about defective heart valve that killed hundreds.

NEVER FORGET: Pfizer agreed to settle lawsuit after jury awarded $43M to Texas woman whose liver was destroyed by Rezulin.

Sources include: [PDF]

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