A CNN report highlights that the price of Acthar has increased almost 97,000% in last two decades
Shares of Mallinckrodt (MNK) are sliding after two whistleblowers said in a lawsuit newly unsealed in federal court that the company bribed doctors and their staffs to increase sales of its H.P. Acthar Gel. Contacted by The Fly, a spokesperson for Mallinckrodt said that the company “strongly disagrees with the substance of the complaint and the sensational characterization of the allegations.”
WHISTLEBLOWERS ACUSE MALLINCKRODT OF BRIBES: Two whistleblowers allege in a lawsuit against Mallinckrodt, in which the Justice Department has now intervened, that the company bribed doctors and their staffs to increase sales of H.P. Acthar Gel, CNN’s Wayne Drash reported. According to the whistleblowers, the effort was part of an intentional “multi-tiered strategy” by Questcor Pharmaceuticals, now Mallinckrodt, to boost sales of Acthar, cheating the government out of millions of dollars. The price of the drug, which is best known for treating a rare infant seizure disorder, has increased about 97,000%, from $40 a vial in 2000 to nearly $39,000 today, according to the report.
‘STRONGLY DISAGREES’: A spokesperson for Mallinckrodt told The Fly that, “The U.S. Department of Justice elected to join an existing civil False Claims Act case against the company, which has been unsealed by a court in the Eastern District of Pennsylvania. The original action was filed in 2012, prior to Mallinckrodt’s ownership of Acthar Gel, and consists of two complaints filed by former Questcor employees. Questcor was the previous owner of Acthar Gel. The allegations pertain principally to legacy Questcor conduct.
Mallinckrodt has cooperated fully with the DOJ in its review of this historical conduct, voluntarily providing documents and information to the government. While we are disappointed the DOJ has elected to proceed with the lawsuit, we have been in advanced settlement talks with the government over the past several months. The company believes these sales and marketing claims are likely to be resolved in the near-term through ongoing negotiations, and further believes a resolution that is reasonable and manageable for all parties is achievable. As the lawsuit principally concerns allegations of legacy conduct prior to Mallinckrodt’s acquisition of Acthar Gel, we do not envision any impact to how Mallinckrodt conducts business today.
Mallinckrodt strongly disagrees with the substance of the complaint and the sensational characterization of the allegations.”
PRICE ACTION: In afternoon trading, shares of Mallinckrodt have dropped over 13% to $15.88.
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