The Department of Justice announced today that Healthpoint Ltd. and DFB Pharmaceuticals will pay as much as $48 million to settle allegations that Healthpoint improperly charged Medicare and Medicaid for prescriptions of Xenaderm, a skin ointment never approved by the FDA. The evidence against Healthpoint included an internal email in which a clinical researcher for the company described the drug as “cruelly insufficient” to meet FDA standards. The closely held companies will pay $28 million to the government under the agreement, plus another $20 million if either undergoes a change in ownership in the next three years.

Like many Medicare fraud cases, this one began as a qui tam lawsuit filed by a private citizen with knowledge of the alleged wrongdoing. The whistleblower’s share of the settlement money has yet to be decided.

Read the entire press release, “Healthpoint Ltd. to Pay up to $48 Million for False Medicaid and Medicare Claims for Unapproved Prescription Drug”

Read our earlier coverage, “Department of Justice Targets Healthpoint in Xenaderm Suit”