Missouri receives $22 million for Medicaid fraud

Friday, September 4, 2009 | 12:01 a.m. CDT

JEFFERSON CITY — Missouri will receive $22 million from Pfizer, a biomedical and pharmaceutical company, and its subsidiaries as part of a nationwide settlement over Medicaid fraud, Attorney General Chris Koster announced Wednesday.

This settlement adds to the record-breaking year in Medicaid fraud recovery for Missouri. The previous record was about $33 million in 2008, but with the Pfizer settlement, the 2009 total is now more than $75 million.

The settlement comes after an investigation conducted by the Department of Justice along with Missouri and 42 other states.

According to a news release from the attorney general's office, the investigation came about because Pfizer and its subsidiaries illegally marketed drugs that the Food and Drug Administration had not approved for certain uses. As a result of the investigation, Pfizer will pay the federal and state governments $1 billion in civil damages to compensate Medicaid and Medicare for damages done as a result of the products.

Deputy Attorney General Joe Dandurand said Missouri was eligible for itsportion of the settlement because of a formula based on effort by the state and money spent per capita on the drugs. Dandurand said the $22 million will go back to the state government's general treasury.

In a news release, Pfizer denied all the civil allegations, except for certain improper actions related to the promotion of Zyvox, a drug that treats bacterial infections. But Pharmacia & Upjohn Inc., a subsidiary of Pfizer, pleaded guilty for misbranding Bextra, an anti-inflammatory drug, with the intent to defraud or mislead. As a result of those charges, Pfizer paid a $1.3 billion fine, separate from the $1 billion settlement.

"Pharmaceutical companies are a critical player in Missouri's health-care system, and like every other part of the system these companies must play by the rules," Koster said in a news release.

Chris Loder of Pfizer said in response to the settlement, "We believe that these bring final closure to serious legal matters and helps us enhance what we do best which is discovering, developing and delivering innovative medicines."

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