Government Settles False Claims Act Case against Dava Pharmaceuticals for $11 Million

On February 8, 2012, the Department of Justice announced yet another win on behalf of the American taxpayers.  Dava Pharmaceuticals Inc., a global pharmaceutical company, has agreed to pay 11 million dollars to settle a False Claims Act lawsuit brought against the company.

According to the complaint, Dava did not comply with their obligations under the Medicaid Prescription Drug Rebate Program.  Under this program, in exchange for State Medicaid coverage of most of a manufacturer’s drugs, the manufacturers are responsible for paying a rebate on those drugs each time they are given to Medicaid patients.  Dava allegedly treated its version of various drugs as the generic make rather than their branded version.  Since the generic versions of drugs are less expensive, the company significantly lowered its Medicaid rebate obligations.

The settlement money is being divided up among a few different organizations.  The federal government will receive about $5.7 million, Medicaid participating states will receive over $5 million, and about $200,000 will go to various public health service entities.

Additionally, the whistleblower in this case, Jim Conrad, will receive 15% of the settlement as his relator’s share as a reward for bringing Dava’s alleged misconduct to the Government’s attention.  Conrad originally filed this case in the District of Maryland under the qui tam provisions of the False Claims Act.

Without whistleblowers like Conrad, it is likely that a significant portion of the fraud committed against the government would go undetected.  It is important to be brave and speak out if you believe someone is taking advantage of Government-funded programs such as Medicaid.  If you know of fraud being committed, contact the experienced whistleblower attorneys at Tycko & Zavareei, LLP today.

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