Drug company to pay Mass. $1 million to settle ineffective drug allegations

By Todd Feathers, Globe Correspondent

A Texas-based drug company will pay nearly $1 million to Massachusetts as part of a nationwide settlement over allegations that it illegally billed for an ineffective drug, prosecutors said.

Healthpoint Ltd. and its partner DFB Pharmaceuticals, Inc. will pay a total of $48 million to 47 states to compensate state health care and Medicaid programs that purchased Xenaderm, a drug the company marketed to treat wounds like pressure ulcers, Attorney General Martha Coakley’s office said in a statement.

The settlement, announced by the Department of Justice in December, will return $666,500 plus interest to MassHealth and $329,550 to the Commonwealth’s Medicaid program, the statement said.

“Illegal drug marketing imposes unnecessary costs on the Medicaid system and taxpayers that are footing the bill,” Coakley said in the statement. “This settlement demonstrates the importance of policing the pharmaceutical industry and remaining vigilant with respect to drug marketing misconduct.”