In the midst of deep public angst over the rising cost of prescription meds, drug giant Pfizer agreed to pay roughly $785 million to put an end to a federal probe into whether it overcharged Medicaid programs for Protonix, a heartburn medication.
"The resolution of these cases reflects a desire by the company to put these cases behind us and to focus on the needs of patients," said Doug Lankler, Pfizer's general counsel, in a statement to the Wall Street Journal.
Technically, Pfizer isn't admitting it did anything wrong. But try telling that to consumers and politicians who are frustrated with what they see as a culture of price-gouging from pharmaceutical companies, most notably the notorious drug executive Martin Shkreli, who not only exponentially increased the price of a life-saving drug, but bragged in emails about the astronomical profits it would yield.
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The lawsuit from the Justice Department stemmed from suspicions that Wyeth, a pharmaceutical firm that Pfizer acquired in 2009, was not offering the same price to Medicaid programs as it was offering to private sector customers, which is illegal.
The settlement figure that the feds accepted was significantly lower than the $2 billion they estimated Wyeth had overbilled state Medicaid agencies.
As a result of the settlement, Pfizer is revising its financial report for the fourth quarter of 2016. Instead of a profit of $613 million, it is reporting a loss of $172 million.
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