The U.S. Department of Justice and 16 states have joined two whistleblower lawsuits alleging that Wyeth (WYE) avoided paying hundreds of millions of dollars in rebates due to state Medicaid programs for the acid reflux drug Protonix.

The lawsuits, filed in federal court in Massachusetts, allege that Wyeth knowingly failed to give the government the same discounts it provided to private purchasers of its drugs.

The federal government and the states allege that Wyeth gave deep discounts on Protonix Oral and Protonix IV to hospitals that bought both drugs together in a bundling arrangement, but didn't pass along those lower prices to state Medicaid programs.

"By offering massive discounts to hospitals, but then hiding that information from the Medicaid program, we believe Wyeth caused Medicaid programs throughout the country to pay much more for these drugs than they should have," Assistant Attorney General Tony West said in a statement.

-By Brent Kendall, Dow Jones Newswires; 202-862-9222; brent.kendall@dowjones.com