Texas Resolves Multi-State Medicaid Fraud Investigation; Recovers $55 Million

Texas Resolves Multi-State Medicaid Fraud Investigation; Recovers $55 Million

Settlement part of $1 billion multi-state agreement

AUSTIN – Texas Attorney General Greg Abbott, a coalition of state attorneys general and the U.S. Department of Justice today resolved a lengthy civil Medicaid fraud investigation into Pfizer, Inc. As a result, more than $1 billion has been recovered for state Medicaid programs and several federal programs. Texas’ Medicaid program will recover $55 million in a state-federal government share.

According to investigators, Pfizer deceptively marketed its antipsychotic drug Geodon, its arthritis pain medication Bextra, which is no longer on the market, and 11 other pharmaceutical products.

The multi-state and federal investigation revealed that Pfizer unlawfully promoted atypical antipsychotic Geodon for use by Medicaid-eligible children to treat numerous conditions, including attention deficit disorder and anxiety. However, the U.S. Food and Drug Administration (FDA) has not approved Geodon for children. State and federal law prohibits pharmaceutical manufacturers from marketing their drugs for such “off-label” uses. While physicians may, at their discretion, prescribe drugs for off-label uses, it is unlawful for drug manufacturers to promote drugs’ uses which have not been approved by the FDA.

The states’ enforcement effort revealed that Pfizer provided unlawful financial incentives for physicians who wrote off-label prescriptions. Because of Pfizer’s promotional program, Medicaid paid for prescriptions many physicians would not otherwise have written for their patients. As a result, the taxpayer-funded program incurred unnecessary costs.

In a separate settlement, Attorney General Abbott and 42 other attorneys general reached a $33 million dollar agreement with Pfizer. The additional settlement resolves an inquiry into the defendant’s deceptive marketing of Geodon to health care providers. The agreement prevents Pfizer from making any false, misleading or deceptive claims regarding Geodon; promoting Geodon for uses not approved by the FDA; or otherwise promoting Geodon in an unlawful manner. Pfizer must also post online a list of health care providers that received payments from Pfizer.

Last January, Attorney General Abbott reached a $30 million civil Medicaid fraud settlement with Eli Lilly & Co., which unlawfully marketed the atypical antipsychotic Zyprexa. Last year, the Attorney General also recovered $15.7 million from Bristol-Myers Squibb Co. for its illegal marketing of several drugs, including the atypical antipsychotic, Abilify.

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A National Association of Medicaid Fraud Control Units team conducted the investigation and settlement negotiations with Pfizer on behalf of the states. That team included representatives from Texas, Arkansas, Massachusetts, New York, Ohio, Oregon and Virginia.

Today’s agreement reflects a continuing crackdown on waste, fraud and abuse in the Medicaid system. To obtain more information about the Attorney General’s efforts to fight Medicaid fraud, access the agency’s Web site at www.texasattorneygeneral.gov