(BOSTON, Mass.) Pfizer Inc. (“Pfizer”) and its subsidiary Wyeth LLC (“Wyeth”) will pay $784.6 million to the U.S. Government, 37 states and the District of Columbia to resolve False Claims Act charges originally filed by whistleblowers Lauren Kieff and William St. John LaCorte, M.D., that Wyeth overcharged Medicaid programs by underpaying drug rebates for the acid suppression drugs Protonix Oral tablet and Protonix I.V.
The settlement is the seventh largest False Claims Act civil recovery in history. Under the terms of the Settlement Agreement, Wyeth will pay to the United States the sum of $413,248,820 while the participating states shall receive $371,351,180. Kieff is represented by Jeanne A. Markey and Gary L. Azorsky, attorneys at Cohen Milstein Sellers & Toll PLLC, and Shapiro Weissberg & Garin LLP, and Dr. LaCorte is represented by Sherif K. Sakla, M.D., J.D., and Stephanie C. Reuther of The Sakla Law Firm, APLC.
Kieff’s False Claims Act lawsuit was filed in November 2003 in the U.S. District Court, District of Massachusetts, alleging that during the period 2001 through 2006, Wyeth underpaid by millions of dollars its Medicaid rebates to the federal Centers for Medicare & Medicaid Services (CMS) on its acid suppression drugs Protonix Oral tablet and Protonix I.V., a related drug taken intravenously. Dr. LaCorte’s lawsuit, which made similar allegations, was filed against Wyeth in the U.S. District Court, Eastern District of Louisiana in March 2002 and was consolidated with Kieff’s False Claims Act complaint in the District of Massachusetts in 2006.
Medicaid rebates are intended to provide Medicaid, the health insurance program for the poor, with the benefit of the lowest price paid for a prescription drug by a private purchaser. The federal government, the states, and the District of Columbia intervened in the case in 2009, thereby assuming responsibility for its prosecution. At the time that a settlement in principle was achieved in mid-February, the case was scheduled to go to trial on March 7, 2016, less than a month away.
Kieff learned of Wyeth’s actions from her work in the pharmaceutical industry. Dr. LaCorte learned of the alleged fraud while practicing medicine in area hospitals in New Orleans, Louisiana and as a member of the Pharmacy and Therapeutics Committee. Both relators praised the Department of Justice for its perseverance in the case.
Added Dr. LaCorte: “I am pleased with the resolution of these charges against this drug company. The settlement ensures that the government’s and taxpayers’ interests have been appropriately recognized and protected.”
Jeanne Markey, a partner at Cohen Milstein and Kieff’s co-lead counsel in the case, and Sherif Sakla, M.D., J.D., of The Sakla Law Firm, in a joint statement said: “Lauren Kieff and Dr. LaCorte deserve thanks not only for bringing this case to the government’s attention, but for stepping up to the plate and working collaboratively to assist the government in its simply outstanding prosecution of this large and complex lawsuit against corporations with the financial wherewithal to fight back long and hard at every turn. As their counsel, it was a privilege to be part of this extraordinary effort.”
The federal False Claims Act and its state law equivalents permit private citizens to bring lawsuits on behalf of the federal and state governments against persons who present false or fraudulent claims for payment under government contracts or programs, including the Medicaid program. Pursuant to the provisions of the federal False Claims Act and its state law counterparts, whistleblowers Kieff and Dr. LaCorte will share in a portion of the proceeds of the settlement.
In addition to the U.S. Government and the District of Columbia, the 37 states involved in the case are Arkansas, California, Colorado, Connecticut, Delaware, Florida, Hawaii, Illinois, Indiana, Kansas, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico, New York, North Carolina, Oklahoma, Oregon, Rhode Island, South Carolina, South Dakota, Tennessee, Texas, Utah, Vermont, Virginia, Washington, Wisconsin, and Wyoming.
Joining Jeanne Markey as co-lead counsel representing Lauren Kieff is Cohen Milstein partner Gary Azorsky, who with Markey serves as co-chair of the Cohen Milstein Whistleblower/False Claims Act practice group. Kieff also is represented by Casey Preston and Ray Sarola of Cohen Milstein and Jonathan Shapiro of Shapiro Weissberg & Garin LLP, and formerly David M. Rapaport, now deceased. In addition to Dr. Sakla, Dr. LaCorte is represented by Stephanie C. Reuther of The Sakla Law Firm.
The U.S. Government attorneys prosecuting the case were led by Andy Mao and Sanjay Bhambhani of the U.S. Department of Justice in Washington, D.C. and by Gregg Shapiro and Brian Pérez-Daple of the U.S. Attorney’s Office in Boston. Carolyn Ellis of the New York State Attorney General’s Office and Steven Sharobem of the Attorney General’s Office for the Commonwealth of Massachusetts led the states’ efforts in this case, together with Eddie Kirby of the Attorney General’s Office for the State of North Carolina.
Founded in 1969, Cohen Milstein is one of the premier firms in the United States representing plaintiffs individually and on a class wide basis in complex litigation matters, including whistleblowers in False Claims Act cases. The firm has offices in Washington, D.C., New York City, Philadelphia, Chicago, Palm Beach Gardens, and Florida. For more information about Cohen Milstein visit https://www.cohenmilstein.com or call (202) 408-4600. For more information about Cohen Milstein’s Whistleblower/False Claims Act practice group call (267) 479-5700.
The Sakla Law Firm, APLC is a healthcare litigation law firm located in New Orleans, Louisiana with an emphasis on False Claims Act litigation and healthcare law matters.
Shapiro Weissberg & Garin LLP is a boutique law firm located in Boston, Massachusetts that focuses on civil and criminal litigation as well as transactional law.