Justice Department Investigates Whether Pfizer Overcharged State Medicaid Programs for Lipitor
The Department of Justice is investigating whether Pfizer Inc. in 1999 and 2000 overcharged state-run Medicaid programs for its cholesterol treatment Lipitor, according to the company's annual report filed with the Securities and Exchange Commission, the Wall Street Journal reports. Federal law requires pharmaceutical companies to sell their drugs to Medicaid at the "best price available to any customer." The Justice Department will examine whether grants paid to health insurers and pharmacy-benefit managers by Warner Lambert -- which co-marketed the drug with Pfizer until Pfizer took over the company in 2000 -- were actually rebates, which should have been subtracted from the price of Lipitor to determine the best price. If the Justice Department determines that the grants were rebates, Pfizer could be required to pay restitution for overcharging state Medicaid programs, the Journal reports. A Pfizer spokesperson said the company is "cooperating" with the department, which declined to comment. Lipitor is Pfizer's "biggest seller and most important drug" and last year had sales of $6.45 billion, up 28% from 2000 (Hensley, Wall Street Journal, 3/29).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.