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MADISON — Attorney General J.B. Van Hollen announced today that Wisconsin has reached a settlement with Texas-based pharmaceutical manufacturer Healthpoint, Ltd. and its general partner, DFB Pharmaceuticals, to resolve allegations that Healthpoint caused false claims to be submitted to the Wisconsin Medicaid program for an unapproved drug, Xenaderm.
Medicaid is a public health care insurance program for the needy and disabled, jointly-funded by the federal and state governments. The settlement calls for payment of $890,229.63 to the state as its share of $1,545,192.77 attributable to Wisconsin Medicaid. As part of a $48 million settlement announced by the U.S. Department of Justice on December 6, 2012, Healthpoint and DFB will pay roughly $33 million to settle Medicaid-based claims nationally.
The settlement resolves federal and state false claims cases brought against Healthpoint in the U.S. District Court for the District of Massachusetts. Wisconsin intervened in 2011 as one of a consortium of 15 states and the U.S. Department of Justice that worked extensively on the investigation and litigation. The federal and state complaints alleged that Healthpoint manufactures Xenaderm – a skin ointment used primarily to treat nursing home patients’ bed sores – and launched it without Food and Drug Administration (FDA) approval.
According to the complaints, Healthpoint marketed Xenaderm by modeling it on a pre-1962 drug that the FDA had never reviewed, notwithstanding the FDA’s determination in the 1970s that Xenaderm’s principal ingredient was “less-than-effective” for its intended use. Since 1981, federal health care programs, including Medicaid, have not paid for “less-than-effective” drugs or drugs “identical, related, or similar” to “less-than-effective” drugs. Healthpoint nevertheless misrepresented the regulatory status of Xenaderm when it submitted quarterly reports to the government and as a result knowingly caused false claims to be submitted for Xenaderm to Medicaid programs.
The claims settled by this agreement are allegations only; there has been no determination of liability. The state was represented by Assistant Attorneys General Tom Storm and Katie Wilson on the matter.