Irish-based pharma group in $100m illegal pricing settlement
Mallinckrodt accused of boosting price of rare autoimmune drug by 85,000%
Irish-based pharmaceutical firm Mallinckrodt said it is pleased to confirm that it has entered a settlement agreement with the US Federal Trade Commission. Photograph:
Irish-based pharmaceutical firm Mallinckrodt agreed to pay $100 million (€93.8 million) to settle claims that its US unit illegally boosted the price of a rare autoimmune drug by 85,000 per cent and bought the rights to a much cheaper competitor to keep it out of the US market.
The unit monopolised the market for years to increase sales of its HP Acthar Gel, typically used to treat multiple sclerosis, infantile spasms and other life-threatening diseases, the US Federal Trade Commission said in a statement. Mallinckrodt must also license the rights to the cheaper drug to a competitor for eventual sale in the United States, the commission said.
Questcor, subsequently bought by Mallinckrodt, bought the rights to Synacthen in 2013 in order to prevent the development of a rival drug, the commission said in its complaint.
Mallinckrodt’s shares fell 5.9 per cent to $46.53 in New York, after declining as much as 14 per cent.
“We are pleased to confirm that we have entered into a settlement agreement with the FTC staff to fully resolve this matter,” Mallinckrodt said in a statement.
In 2001, Questcor bought the rights to Acthar. Over time, the company raised the price from $40 per vial to more than $34,000, the FTC said. Questcor was acquired by Mallinckrodt in 2014.
Acthar, which is off patent, represented 34 per cent of Mallinckrodt’s $3.4 billion in net sales for fiscal 2016, the company said in a government filing.
Per patient, Medicare spent more on Acthar than for any other drug in 2015, putting out $504 million for just 3,104 patients
“This is an egregious case of a monopolist doing a deal to eliminate potential competition and keep its power over pricing,” New York attorney general Eric Schneiderman said in a statement.
“This settlement will restore the competition.”
Mallinckrodt and Questcor, now known as Mallinckrodt ARD, struck the deal with attorneys general in New York, Alaska, Maryland, Texas and Washington, as well as with the commission.
The five states will each receive $10 million from the settlement, with $2 million set aside for attorneys’ fees, the commission said.
– (Reuters / Bloomberg)