The US Department of Justice has filed a lawsuit against Mallinckrodt Pharmaceuticals, claiming they knowingly paid illegal kickbacks to make millions and force American taxpayers to pay for it.
According to the lawsuit, the drug company used the Chronic Disease Fund as a conduit to pay kickbacks as part of a plan to maintain the high price of Acthar.
“The scheme allowed the Company to continually raise Acthar’s price yet market it as ‘free’ to patients and doctors, shifting the drug’s ever-increasing cost to Medicare,” the government said in its complaint. “As a result of its conduct, Mallinckrodt caused the submission of millions of dollars in false Medicare claims for Acthar.”
“Drug companies are not allowed to pay patients’ co-pays. That rule is designed to prevent the very thing Mallinckrodt allegedly did here — outrageously jack up Acthar’s price and leave the government with the entire bill,” US Attorney William McSwain said in a statement.
The lawsuit demands a jury trial to shed light about the drug company’s actions. The price of Acthar, which is known for treating babies with a debilitating seizure disorder, went up from $40 a vial in 2000 to almost $39,000 today. If the company is found liable, they could face fines of nearly $240 million.
Mark Casey, a lawyer for Mallinckrodt, said that the company tries to repair legal issues in a reasonable and manageable way.
“Unfortunately, that has not been possible to date regarding the allegations relating to Questcor’s charitable foundation activities, despite what we believe was lawful and appropriate activity,” he said.
The drug’s price increase makes it one of the most dramatic drug increases in the country’s history, according to Stephen Schondelmeyer, director of the PRIME Institute.
“If gas [prices] increased from 1993 to 2019 at the rate of H.P. Acthar, gas today would cost $1,300 a gallon,” he said.