After a lengthy government investigation, drug manufacturer Pfizer agreed to pay $784 million last month to settle claims that its Wyeth unit overcharged Medicaid for the heartburn drug Protonix. The settlement agreement resolved claims filed by Pfizer whistleblower William LaCorte, who accused the drugmaker of failing to provide Medicaid with the same discounts on Protonix that it provided to other customers.
LaCorte decided to blow the whistle on Wyeth in 2009. His was one of two Pfizer whistleblower lawsuits filed at the time accusing Wyeth of failing to provide the government with accurate pricing on Protonix. Wyeth had recently been acquired by Pfizer.
The Pfizer whistleblower lawsuits claimed Wyeth failed to provide government health care agencies with the same “Best Price” discounts on Protonix that the drugmaker was offering to its other customers. According to court documents, Wyeth offered “deep discounts” on Protonix to thousands of hospitals across the country using bundled pricing, allowing the drugmaker to market these discounts to the hospitals as a way to drive “spillover” retail sales covered by Medicaid and other insurers at higher prices.
Drug manufacturers are required to provide government health care agencies with Best Price reports detailing the drug prices offered to other customers. The Pfizer whistleblower lawsuits claimed that Wyeth knowingly ignored this requirement, which resulted in Medicaid overpaying for Protonix by hundreds of millions of dollars.
Wyeth reportedly offered discounts on two Protonix products—an intravenous version and an oral version—in response to AstraZeneca’s aggressive pricing on its heartburn drugs, Prilosec and Nexium, the latter of which had only recently been introduced. Protonix sales had slowed at the time and AstraZeneca was offering its own drugs at a nominal price in an effort to build market share for Nexium.
According to court documents, the “real money” for Wyeth was in the oral version of Protonix, and the company hoped that bundling the intravenous and oral products together would bolster demand for the oral version of Protonix.
This isn’t the first time that Pfizer has found itself in hot water. In 2013, Pfizer was accused of illegally marketing its immunosuppressive drug Rapamune. The case settled for a reported $490 million. Both Pfizer and Wyeth have been at the center of about half a dozen fraud cases going back to 2002.
Pfizer Whistleblower Receives $59 Million Award
Pfizer whistleblower William LaCorte is not your traditional whistleblower. For starters, he doesn’t work in the pharmaceutical industry—he is a doctor based in New Orleans, Louisiana—which sets him apart from a great many that blow the whistle on pharma companies. What is most interesting about Mr. LaCorte is that he is a serial whistleblower that has filed a number of lawsuits against pharmaceutical companies that have netted him millions in rewards.
Aside from the $59 million reward that he received from this Pfizer whistleblower case, Mr. LaCorte also received roughly $38 million in 2008 for blowing the whistle on Merck in connection with its heartburn medication Pepcid. The allegations in the 2008 Merck case were similar to those in this most recent Pfizer case.
In total, LaCorte has made almost $100 million in payouts stemming from fraud settlements against drug companies. The amount of money he has made has drawn ire from some who say there should be a lifetime cap on whistleblower payouts in order to avoid ‘frivolous lawsuits.’ These naysayers point to the dozens of lawsuits that LaCorte has filed over the last 20 years, a number of which were not successful.
Since 2004, Pfizer has settled three of the largest healthcare fraud cases in the history of the United States. These three cases alone—which includes the Pfizer whistleblower case above—have returned roughly $3.51 billion (which includes a $1.3 billion criminal fine as part of a landmark 2009 settlement) to the government.
If we are to be effective at rooting out serial fraudsters, we need to welcome whistleblowers like William LaCorte, not try to limit their ability to bring pharma companies to justice when they step out of line. Remember, being a whistleblower isn’t as easy as filing a lawsuit and collecting a reward—these cases can take years to build and can be stressful for the relaters and their families. We need more people like Mr. LaCorte.