February 20, 2003
Sean Caine, 410-576-6357
ANNOUNCES $49 MILLION SETTLEMENT WITH PFIZER
Will Receive over $190,000 in Restitution and Penalties
General J. Joseph Curran, Jr. announced today that a settlement
has been reached with Pfizer, Inc. to pay $49 million to the State
Medicaid programs for violating the federal Medicaid drug rebate
statute by failing to accurately report statutorily mandated "best
price" information for Lipitor, an anti-cholesterol medication.
As part of the settlement, the State of Maryland will recover $190,231
in restitution and penalties. Forty-seven states and the District
of Columbia are participating in the settlement.
federal Medicaid drug rebate statute requires that all pharmaceutical
manufacturers that supply products to Medicaid recipients must provide
"best price" information to the Centers for Medicare and
Medicaid Services. CMS uses this "best price" information
to calculate rebates payable to the state Medicaid programs under
liability is based on its acquisition of Warner-Lambert, the developer
of Lipitor. In 1999, representatives of Warner-Lambert provided
unrestricted "educational grants" of $250,000 to a health
maintenance organization in exchange for keeping Lipitor on the
HMOs formulary. This settlement is based on the states
contention that this $250,000 should have been included in the calculation
of "best price" under the federal Medicaid drug rebate
statute. By failing to include this amount in the calculation of
"best price", the state Medicaid programs received improperly
lowered rebate amounts for 1999.
price of prescription drugs is a major concern for many peopleespecially
those who depend on Medicaid for financial support," Attorney
General Curran said. "I am hopeful that this action will put
drug manufacturers on notice that we will monitor drug pricing methods
and strictly enforce existing laws to protect Maryland consumers."
part of the settlement, Pfizer has entered into a Corporate Integrity
Agreement with United States Department of Health and human Services
Inspector General. The CIA will require strict scrutiny of Pfizers
marketing and sales practices for the next five years.