Pfizer Settles Medicaid Case for $785 Million
Pfizer has announced that it had settled outstanding claims for a total of more than $784 million related to calculated Medicaid rebates for the drug Protonix.
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Before markets opened Tuesday, Pfizer Inc. (NYSE: PFE) announced that it had settled outstanding claims for a total of $784.6 million related to calculated Medicaid rebates for the drug Protonix. The settlement was charged to the company’s fourth-quarter and resulted in Pfizer’s reissue of its quarterly and full-year financial results.
On GAAP basis, Pfizer reported that quarterly earnings per share were reduced by $0.03 from the previously reported total of $0.10. Adjusted earnings of $0.53 per share were not affected, nor were full-year earnings on either a GAAP or adjusted basis.
The claims dated from 2001 to 2006 and were laid against Wyeth, which Pfizer purchased in 2009. Pfizer’s executive vice-president and general counsel said:
We are pleased to have reached an agreement in principle to resolve these cases, which involve historic conduct that occurred at least 10 years ago, before Pfizer acquired Wyeth. The resolution of these cases reflects a desire by the Company to put these cases behind us and to focus on the needs of patients.
The settlement still requires court approval.
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The settlement and accounting change had a positive change on Pfizer’s share price in Tuesday’s premarket trading. Shares traded up about 1.3%, at $29.75 in a 52-week range of $28.25 to $36.46.
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Paul Ausick has been writing for 247Wallst.com for more than a decade. He has written extensively on investing in the energy, defense, and technology sectors. In a previous life, he wrote technical documentation and managed a marketing communications group in Silicon Valley.
He has a bachelor's degree in English from the University of Chicago and now lives in Montana, where he fishes for trout in the summer and stays inside during the winter.
