March 16, 2012
Jefferson City, Mo. – Attorney General Chris Koster announced today that Missouri has joined other states and the federal government and reached an agreement in principle with Dava Pharmaceuticals, Inc. (Dava), a Delaware corporation, to settle allegations that between Oct. 1, 2005 and Sept. 30, 2009, the company underpaid their rebate obligations under the Medicaid Prescription Drug Rebate Program. Under that program, participating drug companies are required to pay quarterly rebates to state Medicaid programs based in part on whether the drug is a “generic” or “branded” product. Dava will pay the states and the federal government a total of $11 million under the settlement. Missouri will recover more than $200,000.
Dava treated its version of the drugs cefdinir, clarithromycin and methotrexate as “generic” drugs, rather than “branded” drugs, thereby lowering the overall percentage rebate payable to Medicaid. In addition, Dava further reduced its Medicaid rebate obligations by incorrectly calculating average manufacturer prices for its versions of the drugs, thereby overcharging Medicaid and other federal healthcare programs for these drugs.
“All parties involved with the Medicaid program must follow the rules,” Koster said. “I am pleased we were able to recover these funds and return scarce health-care dollars to the state of Missouri.”
Koster said citizens should report suspected Medicaid provider fraud or abuse and neglect to his Medicaid Fraud Hotline toll free at 800-286-3932, e-mail the complaint to email@example.com or complete a complaint form at the Attorney General’s Medicaid Fraud Website at http://ago.mo.gov/divisions/medicaid-fraud-control-unit-faqs.htm.