Pfizer’s Free Medicines program, “Maintain,” launched last week, promising to offer relief to many newly unemployed Americans. It seems like a good idea, and perhaps it will shine a positive light on the industry. Unfortunately, Big Pharma’s good intentions may be overshadowed by new accusations of overcharging state Medicaid programs.
Yesterday, the US Justice Department accused Wyeth (set to be purchased by Pfizer in a $60 billion deal by the end of this year) of charging Medicaid more than it had charged several hospitals for two versions of Protonix, a stomach acid drug. The government says that between 2000 and 2006, the company bundled the i.v. version of the drug with the oral version and offered these at a discounted price for hospitals but then hid information about the discounts from Medicaid. Sixteen states joined the Justice Department in filing the lawsuit in a Massachusetts federal district court. The government seeks penalties of as much as three times the amount lost by Medicaid (the total amount has not been released).
Meanwhile Pfizer continues to deal with a separate Medicaid-related lawsuit. In February 2009, a Dane County, Wisconsin, jury found Pfizer’s Pharmacia unit guilty of defrauding the state Medicaid program and violating consumer protection laws. The state accused Pharmacia of publishing false average wholesale prices. The company was ordered to pay $9 million. In addition, the jury found that Pharmacia violated the Medicaid Fraud law 1.44 million times. Last week, Wisconsin’s Attorney General J.B. Van Hollen requested forfeitures related to these violations to the amount of nearly $212 million.
For many years, the industry has struggled to defend the prices of its products by pointing to the high cost of research and development. Good-neighbor programs such as “Maintain” may help build consumer faith in the industry. However, until Big Pharma comes clean with Medicaid patients, the road to consumer confidence will be a rough one.