Delaware pharmaceutical company settles with state

Missouri will recover more than $200,000 as part of a multistate settlement valued at $11 million reached with Delaware-based Dava Pharmaceuticals Inc.

The settlement follows allegations that between Oct. 1, 2005 and Sept. 30, 2009, the company underpaid rebate obligations under the Medicaid Prescription Drug Rebate Program, according to a news release from the state attorney general's office.

Drug companies participating in the program are obligated to pay quarterly rebates to state Medicaid programs, which is based partly on whether the drug is a generic or branded product. The allegations claimed Dava treated its versions of the drugs cefdinir, clarithromycin and methotrexate as generic rather than branded, and as a byproduct, it lowered its overall percentage rebate payable to Medicaid.

Dava allegedly further reduced Medicaid rebate obligations by incorrectly calculating the average manufacturer prices for the drugs, leading to Medicaid and other federal health care programs being overcharged for them.

“All parties involved with the Medicaid program must follow the rules,” Koster said in the release. “I am pleased we were able to recover these funds and return scarce health care dollars to the state of Missouri.”