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Mallinckrodt Agrees To Pay $15.4M In DOJ Settlement Over Acthar Subsidies

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Mallinckrodt Agrees To Pay $15.4M In DOJ Settlement Over Acthar Subsidies

Biopharmaceutical company Mallinckrodt plc (NYSE: MNK) said Wednesday it reached an agreement in principle with the Department of Justice relating to "legacy sales and marketing activites" by its Questcor subsidiary. 

The company said it expects to pay $15.4 million under a False Claims Act settlement with no admission of wrongdoing. 

The Justice Department accused Questcor in the years 2010-2014 of using a patient charity as a means of improperly subsidizing Medicare copayments in order to continue raising prices of H.P. Acthar gel, according to Reuters.

Acthar cost $50 per vial in 2001, and the drug's price today is nearly $40,000, Reuters said. 

Mallinckrodt bought Questcor in 2014 for $5.6 billion. 

Mallinckrodt Hit With New Civil Suit 

At the same time, the Wall Street Journal reported Wednesday that federal prosecutors are suing Mallinckrodt, accusing the company of causing millions of dollars in false claims being submitted to Medicare as a result of copay subsidies it paid to a foundation. 

Mallinckrodt said in its Wednesday statement that the allegations are tied to "legacy" conduct by Questcor, and said the donations to the Chronic Disease Fund were made before Mallinckrodt bought the company or were for grandfathered patients approved before the acquisition. 

"Mallinckrodt denies any wrongdoing on the part of Questcor during the relevant period and intends to vigorously defend the company in this matter," according to the company. 

Mallinckrodt shares were down 7.93 percent at $8.94 at the time of publication Wednesday. 

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Posted-In: Acthar Reuters Wall Street JournalBiotech News Legal Media General Best of Benzinga

 

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