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After a long-running government investigation, Pfizer has agreed to pay more than $784 million to settle allegations that its Wyeth unit overcharged state Medicaid programs for the Protonix heartburn drug.

The deal, which came less than three weeks before a trial was to begin in federal court in Boston, is being settled for substantially less than the $2 billion in liability that the US Department of Justice contended the drug maker faced, according to court documents.


The feds had filed a lawsuit in 2009 accusing Wyeth — which Pfizer had recently acquired — of failing to provide state Medicaid programs the same discounts that were given to other customers. The lawsuit alleged the drug maker failed to offer these discounts, which are known as the “Best Price” and is a means of ensuring that state agencies do not overpay for medicines, between 2001 and 2006.

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