For Immediate Release - July 30, 2013

Pharmaceutical Company to Pay $2.9 Million to State Medicaid Program to Settle Claims of Off-Label Marketing of Kidney Transplant Drug

Wyeth Pharmaceuticals to Pay $491 Million in Total to Federal and State Authorities; Pleads Guilty to Violations of U.S. Food, Drug, and Cosmetic Act

BOSTON – A pharmaceutical company headquartered in Pennsylvania has agreed to pay more than $2.9 million to the state’s Medicaid program to resolve allegations that it promoted the sale of a kidney transplant drug for uses that were not approved by the Food and Drug Administration (FDA), Attorney General Martha Coakley announced today.

The AG’s Office joined a 50-state civil settlement worth $257 million with the District of Columbia and the federal government to resolve allegations that Wyeth Pharmaceuticals, Inc. marketed off-label uses for Rapamune, an FDA-approved kidney transplant drug that is prescribed to prevent a patient’s body from rejecting a donor organ following transplants. In addition to the settlement, Wyeth also pleaded guilty today in federal court in Oklahoma to a violation of the U.S. Food, Drug, and Cosmetic Act for similar allegations, and has agreed to pay more than $233 million in criminal fines and forfeitures.

“Pharmaceutical manufacturers must adhere to FDA standards for drugs sold in the United States, instead of marketing them for uses that are not safe,” AG Coakley said.

The settlement resulted from whistleblower actions filed in the United States District Courts for the Eastern District of Pennsylvania and the Western District of Oklahoma under the federal False Claims Act and various state false claims statutes. The complaints alleged that Wyeth marketed Rapamune for use in connection with organ transplant patients other than those receiving new kidneys. The complaints also alleged that Wyeth improperly marketed the drug for treatment regimens for transplant patients who used another immunosuppressant drug before using Rapamune, and for patients who did not receive Rapamune around the time of a kidney transplant.

According to the settlement, Wyeth has agreed to pay the states and the federal government more than $257 million in civil damages and penalties to resolve the civil allegations, including $60 million that will go to state Medicaid programs and approximately $197 million that will be returned to other federally-funded health care programs affected by Wyeth’s conduct.

MassHealth, the Medicaid program in Massachusetts, will receive more than $2.9 million. MassHealth provides funds for health care products and services to eligible low-income individuals, including people with disabilities, children and elder citizens. 

In 2009, Pfizer Inc. acquired Wyeth after the company’s alleged off-label marketing conduct had occurred. Pfizer cooperated fully with the federal government and the states in the investigation.

Assistant Attorney General Robert Patten of AG Coakley’s Medicaid Fraud Division (MFD) served as one of the principal negotiators for the states in this settlement, assisted by MFD investigator and data analyst Anthony Megathlin. AG Coakley’s staff participated in the settlement negotiations as members of a team from the National Association of Medicaid Fraud Control Units (NAMFCU). The team included representatives from the offices of the attorneys general for the states of Florida, Michigan, South Carolina, and Virginia.

AG Coakley’s nationally recognized efforts in combating fraud have resulted in the recovery of more than $321 million in taxpayer money for MassHealth.