Wyeth's Own Vendors Gathered Evidence of Alleged Protonix Pricing Scam
Wyeth is being sued by the Department of Justice over its alleged attempt to avoid giving Medicaid the “best price” on its Protonix antacid drugs. The reason the DOJ was able to make the case was because Wyeth’s own vendors gathered evidence of the alleged scheme — evidence that is now being used against the company in the qui tam whistleblower suit unveiled Monday.
Wyeth employee Lauren Kieff first filed the suit under seal in 2003. It alleges that Wyeth lied to Medicaid about the lowest or “best” price of Protonix. In essence, companies must report to Medicaid their “best price,” which must include “bundled” prices — i.e. where drug companies offer hospitals or pharmacies discounts if they make a joint purchase of more than one drug.
The suit alleges that Wyeth could charge $20 for a vial of IV Protonix, but that the price would drop to $4 vial if a hospital bought the vials in conjunction with Oral Protonix at just 28 cents a pop. (Download a copy of U.S. v. Wyeth here.) The suit notes:
In 2001, Wyeth hired a vendor to conduct a series of interviews with hospital pharmacists who had just signed the PPA [Protonix Performance Agreement].
Big mistake! The feds gleaned their juiciest information from transcripts of those interviews. Such as:
Q: Let me get this straight. You pay 15 cents for Protonix and $2.35 a pill for Prevacid? I guess the next logical question is why not just go with Protonix?
A: Well we are, that’s an excellent question, we are going to go in that direction at the next P&T Committee meeting, and that is on the agenda. We are just waiting to see about the acceptance of the IV form to see if there was enough interest in that because the 15 cents is tied in with putting the IV on formulary.
Q: So, in order to get the 15 cent Protonix price, you got to put the IV on?
A: Exactly, you sure do.
(Interview of pharmacist at hospital in Oklahoma)
Hospitals that didn’t go along with the plan didn’t get the discount, thus making it more expensive for reimburser Medicaid.
Allegedly proving Wyeth’s guilty knowledge, the DOJ claims, is that Wyeth had a written policy requiring its executives to report bundled prices as part of its “best price” reporting.
Image by Flickr user joelogon, CC.
Jim Edwards, a former managing editor of Adweek, has covered drug marketing at Brandweek for four years, and is a former Knight-Bagehot fellow at Columbia University's business and journalism schools. Follow him on Twitter or send him an email.
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