AG Gansler Secures Recovery from Dava Pharmaceuticals, Inc.
Failure to pay full rebates is focus of Medicaid fraud scheme
Baltimore, MD (March 7, 2012) - Attorney General Douglas F. Gansler today announced that Maryland, joined by several other states and the federal government, has reached an agreement with Dava Pharmaceuticals, Inc. ("Dava"), a Delaware corporation, to settle allegations that Dava failed to pay required rebates to the Medicaid program. Dava will pay $11 million to Medicaid and other government health care programs. Maryland will receive $7,054 from the settlement.
"Every dollar we recover is another dollar we can put to use helping Marylanders in need," said Attorney General Gansler. "Every action we take puts all vendors on notice that Medicaid fraud is unacceptable and we'll continue to vigorously enforce the law."
The settlement resolves allegations that Dava underpaid rebates owed to the Medicaid program. In order to participate in the Medicaid program, drug manufacturers must report certain pricing information about their drugs to the federal government. This information is then used to calculate a rebate that the manufacturers must pay to Medicaid and other healthcare programs.
The settlement also resolves allegations that Dava incorrectly reported that some of its drugs were generic drugs and misstated other information regarding the drugs' pricing, resulting in Dava paying a lower rebate than it actually owed from Oct. 1, 2005 to Sept. 30, 2009.
A National Association of Medicaid Fraud Control Units (NAMFCU) team consisting of representatives from New York, South Carolina, Texas and Maine participated in the investigation and conducted the settlement negotiations with Dava on behalf of the settling states.