October 28, 2002 Pfizer Corporation
Pfizer Corporation and two of its subsidiaries have agreed to pay $49 Million Dollars to settle a qui tam action filed by David Foster, one of the subsidiary’s employees. The allegations of the case were that the companies fraudulently avoided paying the full amount of rebates which it owed to the government under the national drug Medicaid Rebate program for the cholesterol lowering drug Lipitor. The Medicaid Rebate program requires drug companies to pay quarterly rebates to states in a way intended to account for discounts given by drug companies. The key to the program is a requirement that, for each drug sold, drug companies report to the Center for Medicare and Medicaid Services the best price they offered to any commercial, for-profit customer and pay a quarterly rebate based, in part, upon that best price. Defendant Park-Davis Labs allegedly overstated the Lipitor best price in the first and second quarters of 1999, by concealing $250,000 in cash discounts that were given to one of its key customers.
As part of the settlement, Mr. Foster will receive nearly $6 Million Dollars for having filed the qui tam case.
See U.S. Dept of Justice Press Release 10/28/02