Mallinckrodt down 23% premarket after court ruling on Acthar Medicaid rebates

The U.S. District Court for the District of Columbia has upheld the decision from the U.S. Centers for Medicare & Medicaid Services (CMS) to reverse its determination of the base rate average manufacturer price (AMP) use to calculate rebates for Mallinckrodt’s (NYSE:MNK) top seller Acthar Gel (repository corticotropin).

If the ruling stands, it will have to pay ~$650M for the period from January 1, 2013 to the present. In addition, the prospective change to the rebate calculation will trim Acthar’s annual sales by about $90-100M.

The company says it will move for a stay and reconsideration of the district court’s decision and will pursue an appeal if necessary.

https://seekingalpha.com/news/3551899-mallinckrodt-down-23-premarket-after-court-ruling-on-acthar-medicaid-rebates