New York ? Pfizer Inc. said Monday it will pay $49 million to settle Justice Department allegations that it overcharged the Medicaid program for its cholesterol-lowering drug Lipitor.

The settlement will be split between the federal government and the states.

The charges stemmed from a whistle-blower lawsuit alleging that educational grants by Parke-Davis to the Ochsner Health Plan in 1999 constituted a rebate that lowered the price of the drug for the Louisiana insurer.

Federal law requires drug companies to offer the Medicaid program the lowest price paid by any purchaser.

The suit was brought in 1999 by John David Foster, who worked for Parke-Davis at the time. Pfizer acquired Parke-Davis through its 2000 takeover of Warner-Lambert.

The settlement represents more than double the $21 million the Medicaid program was overcharged, according to Foster’s lawyer, Joel Androphy.