The Department of Justice announced a settlement it reached with Healthpoint Ltd. and DFB Pharmaceuticals for up to $48 million. The settlement resolves allegations that Healthpoint submitted false claims to Medicare and Medicaid for Xenaderm, a prescription skin ointment for the treatment of bed sores in nursing home patients. The companies will pay $28 million now and an additional $20 million if there is a change in ownership of Healthpoint or DFB over the next three years.
According to the allegations, Healthpoint launched Xenaderm without any FDA approval. Additionally, Healthpoint did not complete the required clinical studies on Xenaderm in order to ensure its safety. Finally, Healthpoint was accused of promoting Xenaderm as being reimbursed by Medicaid—even though it was not. This caused false claims to be submitted to Medicare and Medicaid for reimbursement of Xenaderm costs.
The settlement with Healthpoint and DFB is a part of a larger qui-tam False Claims Act case against numerous defendants. The lawsuit was filed by whistleblower Constance Conrad and the government intervened in her case in January 2011. Whistleblowers can receive up to 30% of the recoveries from False Claims Act settlements. Ms. Conrad’s reward for the settlement with Healthpoint and DFB has not yet been determined.
If you are aware of a company committing fraud against the government, there are active steps you can take to stop them. For a free consultation on how to bring your case, contact the attorneys at Tycko & Zavareei today.