Pfizer in talks with feds on Protonix rebate charges

Pfizer ($PFE) is negotiating with the U.S. government to settle claims that it overcharged Medicaid for the stomach drug Protonix, Pharmalot reports, citing legal documents filed in a Boston federal court. The potential liability could be as much as $2 billion, according to those documents.

Pfizer inherited the allegations when it bought Wyeth, which had been sued by 16 states for allegedly avoiding hundreds of millions in Medicaid rebates and by whistleblowers raising similar charges. Seventeen states joined in on the latter suit.

Wyeth allegedly offered big discounts to hospitals for its injectable and oral forms of Protonix, provided the hospitals bought quantities of both meds. The suits claim those discounts weren't reported to Medicaid,  which is supposed to get the best price offered on every drug.

Right now, the company and the Justice Department are asking for extended discovery deadlines, Pharmalot reports, saying that they need extra time "to continue to engage in settlement discussions."

As for potential liability, the drugmaker cited "the high stakes of the litigation" in a filing requesting more documents from the government: "[T]he plaintiffs allege that Wyeth is potentially liable for over two billion dollars," the document states. But unless and until a settlement is reached, we won't know exactly how liable the company will be.

- read the news from Pharmalot