Whistleblower case relates to claims of Wyeth overcharging for acid reflux drugs between 2001 and 2006

Pfizer has agreed in principle to settle a court case relating to claims that its subsidiary Wyeth deliberately overcharged US state medical provider Medicaid for its acid reflux drug Protonix (pantoprazole).

If the court accepts the settlement, Pfizer will pay $785 million (£558 million) to resolve the claims, without admitting liability for the charges. The case alleges that between 2001 and 2006 (before Pfizer acquired Wyeth), the company effectively defrauded Medicaid by not offering the same rebates that were available to non-government insurers.

The case was brought to court under the US False Claims Act, which encourages whistleblowers to report wrongdoing by rewarding them with a share of any fines. The two whistleblowers in this case, a US doctor and former AstraZeneca sales representative, stand to share tens of millions of dollars if the settlement goes through.