WASHINGTON — Pfizer Inc. has agreed to pay $49 million to settle charges that subsidiary Parke-Davis Labs defrauded Medicaid by overcharging for Lipitor, the Justice Department said. Lipitor is a cholesterol-lowering drug and was the world’s top-selling drug in 2001 with sales of $6.45 billion.

Medicaid, the state-federal health insurance program for the poor, requires drug makers to pay quarterly rebates to states to account for discounts drug companies give to their favored customers. Parke-Davis Labs allegedly concealed $250,000 of cash discounts given to a key managed care customer in Louisiana, which allowed it to keep more than $20 million in rebates owed to Medicaid, the Justice Department said. .

(via Reuters)