AG Gansler Pursues Medicaid Fraud Lawsuit Against Healthpoint

Complaint alleges drug company marketed unapproved bed sore medication

BALTIMORE—Attorney General Douglas F. Gansler announced Thursday that Maryland, joined by 16 other states and the federal government, is pursuing legal action against Healthpoint, Ltd. regarding the marketing and sale of Xenaderm, a drug used to treat decubitus ulcers (bed sores). The lawsuit alleges that Healthpoint began marketing the drug in 2002 without FDA approval, even though the FDA had previously determined one of its active ingredients to be less than effective. The Medicaid program does not pay for unapproved drugs that have been determined to be less than effective.

“We’re pursuing this action to protect Marylanders who need proper medical care and to recover the tax dollars that have been wasted on ineffective medication,” said Attorney General Gansler. “Drug manufacturers cannot be allowed to profit at taxpayers’ expense by simply sidestepping the pharmaceutical approval process.”

The complaint alleges that Healthpoint knew Xenaderm was unapproved, and knew of or recklessly disregarded the FDA notices concerning the active ingredient called trypsin. In the 1970’s, the FDA determined on at least two separate occasions that trypsin was ineffective as a debriding agent and rescinded the market approval for products containing trypsin as a debriding agent. Debriding agents aid in the removal of dead tissue and are used in the treatment of bed sores.

According to the complaint, Healthpoint falsely represented that Xenaderm, which came onto the market much later, was eligible for Medicaid reimbursement. As a result of Healthpoint’s false statements, the complaint alleges that Healthpoint caused Medicaid, as well as Medicare, to pay tens of millions of dollars nationwide for an unapproved drug that was ineligible for reimbursement.

The lawsuit is currently pending under the federal False Claims Act.

For more information on the U.S. Department of Justice action:

Source: Office of Attorney General Douglas F. Gansler

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