Drug company must repay Medicare up to $48M for selling unapproved Xenaderm cream

A Texas drug manufacturer owes Medicare up to $48 million in reimbursements for selling a drug to nursing homes that was never approved by the Food and Drug Administration (FDA). The settlement requires Forth Worth-based Healthpoint and its parent DFB Pharmaceuticals to return $28 million in Medicare reimbursements now, and another $20 million if the company is sold.

Healthpoint’s Xenaderm cream was marketed to long-term care facilities as a prescription ointment for removing dead skin cells and stimulating blood flow around wounds and pressure ulcers, the Justice Department said.  But the FDA had refused to approve the drug, deeming its active ingredient, trypsin, ineffective as a debriding agent. Unapproved drugs are not  eligible for Medicare or Medicaid reimbursement.

The suit does not imply that Xenaderm is dangerous or tainted for use as instructed. The case centered on Healthpoint’s improper marketing of the product as “Medicare-reimbursed,” when it was not eligible for such reimbursement.

Healthpoint is one of 24 pharmaceutical companies included in the same 2002 lawsuit accused of selling unapproved drugs to Medicare and state Medicaid programs.

The case is another in the growing pool of whistleblower suits filed under the False Claims Act.

Pamela Tabar

Pamela Tabar was editor-in-chief of I Advance Senior Care from 2013-2018. She has worked as a writer and editor for healthcare business media since 1998, including as News Editor of Healthcare Informatics. She has a master’s degree in journalism from Kent State University and a master’s degree in English from the University of York, England.