By Daniel Wiessner
Feb 25 (Reuters) - Drugmaker Healthpoint Ltd will pay the
state of Massachusetts nearly $1 million to settle claims that
it illegally marketed an unapproved prescription drug, the
state's attorney general announced on Friday.
The settlement with Healthpoint and its general partner DFB
Pharmaceuticals, Inc, was part of a $48 million national
settlement to resolve allegations that Healthpoint charged
Medicaid and Medicare for Xenaderm even though it had not been
approved by the Food and Drug Administration. Xenaderm is a skin
ointment used to treat bed and other pressure sores.
Massachusetts Attorney General Martha Coakley on Friday said
her state would receive $996,000.
"This settlement demonstrates the importance of policing the
pharmaceutical industry and remaining vigilant with respect to
drug marketing misconduct," Coakley said in a statement.
The Texas-based company has not admitted wrongdoing. Michael
Loucks and Kara Fay of Skadden, Arps, Slate, Meagher & Flom, who
represented Healthpoint in the federal suit, did not return
requests for comment.
The larger settlement was announced in December by the U.S.
Justice Department, which in 2011 filed a complaint under the
False Claims Act against Healthpoint in the District of
The active ingredient in Xenaderm is trypsin, which in the
1970s was found by the FDA to be ineffective for treating skin
sores, the complaint said. Federal prosecutors alleged
Healthpoint knew trypsin was unapproved but falsely marketed
Xenaderm to nursing homes as an approved drug.
According to the complaint, Healthpoint submitted false
statements about the regulatory status of Xenaderm to obtain
Medicaid and Medicare reimbursements.
The complaint says the alleged scheme cost Medicare and
states' Medicaid programs tens of millions of dollars.
Healthpoint in December agreed to pay up to $33 million to
47 states, as well as $15 million to the Medicare prescription
drug benefit program, to settle the False Claims suit.
The Healthpoint case is part of a larger crackdown on the
sale of unapproved pharmaceuticals. In October, the FDA ordered
more than 4,100 online pharmacies to stop selling unapproved
The first False Claims settlement involving unapproved drugs
came in 2010, when Eon Labs agreed to pay $3.5 million to
resolve allegations that it continued to sell a drug that had
been deemed ineffective by the FDA, according to a Justice
Department press release.
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