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BOSTON – A Texas company will pay Massachusetts $996,000 as part of a $48 million settlement, to resolve allegations it charged MassHealth for an unapproved, ineffective ointment used to treat wounds, Attorney General Martha Coakley announced last week.
The settlement with Healthpoint Ltd. and its general partner, DFB Pharmaceuticals Inc., stems from a $48 million settlement announced by the United States Department of Justice in December. The companies will pay approximately $33 million of that to settle Medicaid-based claims nationally, along with $15 million to the Medicare prescription-drug benefit program. According to Coakley, the settlement will return $666,500 plus interest directly to MassHealth and $329,550 in federal funding for the state’s Medicaid program.
According to the commonwealth’s complaint, Healthpoint allegedly marketed an ointment called Xenaderm without FDA approval by modeling it on a pre-1962 drug that the FDA also never reviewed. In the 1970s, the FDA determined that Xenaderm’s principal ingredient was “less than effective” for its intended use in treating wounds such as bedsores.
Since 1981, federal health care programs including Medicaid, have not paid for “less than effective” drugs, according to Coakley. However, Healthpoint still allegedly misrepresented the regulatory status of Xenaderm to MassHealth and other state Medicaid programs from 2002 to 2006. •