The U.S. Department of Justice and 16 states joined two whistleblower lawsuits Monday alleging that Wyeth (WYE) overcharged state Medicaid programs hundreds of millions of dollars for the acid reflux drug Protonix.

The lawsuits, filed in federal court in Massachusetts, allege that the New Jersey-based drug maker knowingly failed to give the government the same discounts it provided to private purchasers of its drugs.

The government is seeking to recover monetary damages that are three times the amount of the alleged fraud, as well as civil penalties.

The federal government and the states allege that Wyeth gave deep discounts on oral and intravenous versions of Protonix 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.

Wyeth spokesman Douglas Petkus said, "The company believes that its pricing calculations were correct and intends to defend itself vigorously in these actions."

The company had previously disclosed the Protonix pricing investigation in SEC filings, but all details of the lawsuits had been under seal. The lawsuits were made public Monday when the government intervened in the case.

Under federal law, drug makers are required to report to the government the best prices for their drugs and give those reduced rates to the Medicaid program in the form of rebates.

Government lawyers allege that the prices Wyeth quoted in its government reports on Protonix did not reflect the discounts given to hospitals. The government says hospitals who bought Protonix through the bundling program were entitled to up to a 94% discount off the list price of the oral version of the drug, and up to 80% off the list price of the intravenous version.

The discounting at issue allegedly took place between 2000 and 2006.

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