(CN) — Pfizer agreed on Wednesday to pay $784.6 million to resolve claims one of its companies failed to give Medicaid the same discounts it gave private purchasers for two acid reflux medications.
The drugs in question, Protonix Oral and Protonix IV, were manufactured by New Jersey-based Wyeth.
Pfizer purchased Wyeth in 2009, three years after the conduct that gave rise to the settlement had ended, prosecutors said.
The deal reached tentatively in February and finalized on Wednesday centered on Wyeth's practices related to rebates on Protonix sales between 2001 and 2006.
Prosecutors said Wyeth relied on a "bundled sales arrangement" to give thousands of hospitals deep discounts on the two versions of Protonix, but failed to report those prices to the government as required by law so Medicaid can receive the same discounts.
Wyeth offered the discounts because it "wanted to control the hospital market because patients discharged from the hospital on Protonix Oral were likely to stay on the drug for long periods of time, rather than switch to competing PPIs," the Justice Department said.
At the same time, other payers, including Medicaid, would pay nearly full price for the drug, the government said.
In a statement Pfizer said it is pleased to have finalized the settlement agreement.
Read the Top 8
Sign up for the Top 8, a roundup of the day's top stories delivered directly to your inbox Monday through Friday.