AG McDaniel Settlement Nets State $533,000

by Talk Business & Politics staff ( 2 views 

Attorney General Dustin McDaniel (D) announced that Arkansas, other states and the federal government have reached a settlement agreement with Healthpoint Ltd. to resolve allegations that the Texas-based pharmaceutical manufacturer caused false claims to be filed to the state’s Medicaid program in violation of Arkansas law.

Arkansas’s Medicaid program, with federal matching funds added, will receive $533,192.49 as a result of the settlement.

“Taxpayers were required to foot the bill for this drug company’s misrepresentations,” McDaniel said. “This settlement restores money to the Medicaid program and demonstrates our resolve to pursue those who would commit Medicaid fraud.”

The states and federal government alleged Healthpoint knew that its drug Xenaderm was ineligible for reimbursement because the FDA had determined in the 1970s that the drug’s principal ingredient was “less than effective” for its intended use. Since 1981, Medicaid has not paid for “less than effective” drugs or those drugs that are identical, similar or related to them.

Nevertheless, Healthpoint was alleged to have falsely represented to the government that its drug was eligible for reimbursement.

Xenaderm is a topical ointment used to treat bed and pressure sores.

The settlement is based on an action filed against Healthpoint and its general partner, DFB Pharmaceuticals, in U.S. District Court in Massachusetts.