Recently, Nolan & Auerbach, P.A. announced the $11 million pharmaceutical fraud settlement of a whistleblower’s False Claims Act case against Dava Pharmaceuticals, Inc.

Pharmaceutical labelers that want their products available to Medicaid beneficiaries under the Medicaid program must enter into a Drug Rebate Agreement. Pursuant to the Medicaid Drug Rebate program, the rebate owed to the States under the Medicaid program is less for non-innovator (generic) drugs than for brand name drugs.

This rebate fraud settlement resolved allegations that Dava Pharmaceuticals falsely claimed the lower rebate amount by incorrectly classifying its version of the drugs Cefdinir, Clarithromycin, and Methotrexate as “non-innovator” drugs, rather than “innovator” (single source or innovator multiple source) drugs. This, in turn permitted Dava to underpay its rebate obligations to the Medicaid Drug Rebate Program.

Federal and State False Claims Acts allow private citizens with detailed knowledge of fraud to bring an action on behalf of the governments and to assist in the recovery of the governments’ stolen dollars. These statutes allow the government to recover three times the amount it was defrauded, in addition to civil penalties of $5,500 to $11,000 per false claim. Successful whistleblowers can receive between 15 and 30 percent of the governments’ recovery.

More information for whistleblowers is located at the Nolan & Auerbach, P.A. website.