The Maryland Attorney General announced last month Maryland has reached an agreement with
with Healthpoint and DFB Pharmaceuticals, its partner. The settlement, to which fifteen additional states and the federal government are also plaintiffs, is a result of allegations that Healthpoint was responsible for causing false claims to be submitted to the Maryland Medicaid programs for one of its products called Xenaderm. Xenaderm is a skin ointment that was prescribed to many nursing home, and potentially other, patients for the treatment of bed sores. However, the drug has not received the required approval from the Food and Drug Administration (FDA).
The various complaints related to the settlement alleged that Healthpoint unlawfully marketed Xenaderm without FDA approval. The allegations further claimed that this marketing was modeled upon a drug created some time before 1962, which itself had received review from the FDA. The FDA ruled in the1970s that the principal ingredient in Xenaderm was “less than effective” for treating bed sores, its intended use. The defendant(s) allegedly misrepresented the drug’s regulatory status repeatedly in reports that it submitted to both federal and state agencies.
Subject to terms of the $48 million settlement, which is to be awarded to 47 states and the federal government, defendants Healthpoint and DFB Pharmaceuticals will have to pay roughly $33 million to settle Medicaid-based claims nationally. Maryland itself will receive nearly $350,000 in refunds to the state’s Medicaid program, which accounts for the improper payments on behalf of both the state and federal governments.