The U. S. Justice Department said that it along with 16 states has joined in two whistleblower lawsuits against Wyeth, filed in federal court in Massachusetts.

The justice Department accused the Madison, New Jersey-based drug company of giving hospitals steep discounts on the drugs Protonix Oral and Protonix IV, which reduce stomach acid, with the objective of winning over the retail market by means of winning over the same patients once they were released from the hospital.

Now, according to law, it is mandatory for manufacturers of brand-name drugs to offer the same rebates to state Medicaid programs that they provide to other customers.

"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.

However, in defense of its pricing strategy, Doug Petkus, a Wyeth spokesman said that the Company believes that its pricing calculations were correct.

Wyeth's shares fell 50 cents to $44.37 in after-hours trading.