In The News

Pharmaceutical Fraud Recovery

Dava Pharmaceuticals Inc. has agreed to pay $11 million to settle allegations that it violated the False Claims Act by misreporting drug prices in order to reduce its Medicaid Drug Rebate obligations.

The settlement resolves allegations that between Oct. 1, 2005 and Sept. 30, 2009, Dava and its corporate predecessors knowingly 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 a drug is a “generic” or “branded” product and the difference between what the health care program paid for the drug and prices paid by other purchasers.

In order to reduce its Medicaid rebate obligation, Dava incorrectly treated its version of the drugs cefdinir, clarithromycin and methotrexate as “generic” drugs rather than “branded” products, 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 cefdinir, clarithromycin, methotrexate and rheumatrex. As a result, Dava underpaid drug rebates to the Medicaid program and overcharged certain public health service entities for these products.

Boeing Settlement

The Boeing Company has agreed to pay the United States $4.4 million and to undertake several programmatic changes, resolving qui tam allegations that it improperly billed the Department of Defense for work at Boeing’s facility in Ridley Park, Pennsylvania. Beginning in approximately 2003, the United States Department of Defense awarded Boeing contracts to produce and modify Chinook helicopters as part of the Army’s effort to modernize its fleet of heavy lift helicopters. More than 100 new Chinooks were ordered, and Boeing also agreed to “remanufacture” several hundred older Chinook helicopters by overhauling their airframes to accommodate upgrades of the helicopter’s avionics and engines. The vast majority of the work performed in the Chinook remanufacturing program was paid based on a pre-negotiated price. However, Boeing instructed the mechanics assigned to the Chinook program to perform other, non-billable work while separately billing the United States for their time, resulting in the United States being charged for work for which it had already paid.

Software Pricing Settlement

Oracle and Oracle America has agreed to pay $199.5 million to the U.S. government to resolve a False Claims Act lawsuit.

The settlement concerns a 1998 contract in which Oracle agreed to sell software licenses and technical support to federal government entities through the General Services Administration’s Multiple Award Schedule program

The settlement resolves allegations that Oracle repeatedly failed to meet its contractual obligations to give the GSA full and accurate information about its commercial sales practices, and that Oracle lied to the GSA about its sales practices and discounts, the officials said. The lawsuit alleged that, based on Oracle’s actions, the United States accepted lower discounts and, as a result, paid far more than it should have for Oracle products.

The MAS program streamlines the procurement process for the government and other GSA-authorized purchasers. To be awarded a MAS contract, the broad marketplace access and the administration simplicity that comes from selling to hundreds of government purchasers through one central contract, contractors must agree to disclose commercial pricing policies and practices and to abide by the contract terms.