Summary
Pfizer Inc. (PFE) filed an 8-K on February 16, 2016, to announce a significant development concerning its subsidiary, Wyeth LLC. Wyeth reached an Agreement in Principle with the U.S. Department of Justice to resolve ongoing litigation regarding Medicaid rebate calculations for the drug Protonix between 2001 and 2006. This settlement involves a payment of $784.6 million and will be recorded as a charge in Pfizer's fourth quarter and full year 2015 financial results, which are being reissued to reflect this impact. While the agreement is in principle and subject to final negotiation and court approval, Pfizer has recognized the $784.6 million charge in its Q4 2015 GAAP financial statements. It is important to note that Pfizer's Non-GAAP adjusted financial information for the same period remains unaffected by this charge. Investors should be aware that the final resolution may differ from the current agreement, and the company disclaims any obligation to update forward-looking statements.
Key Highlights
- 1Pfizer's subsidiary Wyeth LLC reached an Agreement in Principle with the U.S. Department of Justice to settle litigation.
- 2The settlement resolves allegations concerning Medicaid rebates for Protonix between 2001-2006, prior to Pfizer's acquisition of Wyeth.
- 3A payment of $784.6 million will be made to resolve these cases.
- 4Pfizer is reissuing its Q4 and full year 2015 GAAP financial results to include a $784.6 million charge related to this settlement.
- 5The company's Non-GAAP adjusted financial information for Q4 and full year 2015 is not affected by this charge.
- 6The Agreement in Principle is subject to final settlement agreements and court approval.
- 7Pfizer does not admit liability as part of this agreement.