Pa., Healthpoint Ltd. reach $2 million Xenaderm settlement

By Jon Campisi | Mar 6, 2013

The office of Pennsylvania Attorney General Kathleen Kane announced this week that the

commonwealth has reached a nearly $2 million settlement with Healthpoint Ltd. and DFB Pharmaceuticals to resolve allegations that Healthpoint submitted false claims to Medicaid for the unapproved drug Xenaderm, which was ineligible for reimbursement by the program.

The commonwealth’s settlement is part of a larger agreement with the United States Justice Department that the companies pay up to $48 million to resolve allegations that they caused false claims to be submitted to both Medicare and Medicaid programs.

“For a pharmaceutical company to knowingly misrepresent a drug, take taxpayers dollars and then, overcharge state programs is unconscionable,” Kane said in a statement. “My administration will take action against any company that disregards the law and puts our citizens at risk.”

According to the Pennsylvania Attorney General’s Office, Healthpoint failed to accurately represent the regulatory status of Xenaderm when it submitted quarterly reports to the federal government and knowingly submitted false claims to the state’s Medicaid program.

If the pharmaceutical had not bee approved by the Food and Drug Administration, the complaint against the companies alleged, then every bill submitted to the state’s Medicaid program was considered to be a false claim.

The complaint against the drugmakers had asserted that Healthpoint’s business strategy was to market new prescription drugs modeled after the drug products that were on the market before October 1962 in order to avoid the time, effort and expense of obtaining FDA approval.

The lawsuit had also alleged that Healthpoint failed to complete any double-blind placebo-controlled studies that would establish the safety and effectiveness of Xenaderm.

The settlement also resolved allegations against Healthpoint in a multi-defendant whistleblower suit that had been brought under the qui tam provisions of the False Claims Act, according to the Pennsylvania Attorney General’s Office.

Other states beside Pennsylvania whose attorneys general participated in the settlement negotiations with Healthpoint were Florida, North Carolina, Ohio, Massachusetts and Virginia.

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