{"id":12371,"date":"2019-06-20T05:01:51","date_gmt":"2019-06-20T09:01:51","guid":{"rendered":"https:\/\/www.policymed.com\/?p=12371"},"modified":"2019-06-19T13:31:57","modified_gmt":"2019-06-19T17:31:57","slug":"mallinckrodt-in-hot-water-tries-to-reach-settlement-gets-hit-with-new-problems","status":"publish","type":"post","link":"https:\/\/www.policymed.com\/2019\/06\/mallinckrodt-in-hot-water-tries-to-reach-settlement-gets-hit-with-new-problems.html","title":{"rendered":"Mallinckrodt in Hot Water: Tries to Reach Settlement, Gets Hit With New Problems"},"content":{"rendered":"<p>01On June 5, 2019, the United States Department of Justice (DOJ) <a href=\"https:\/\/www.justice.gov\/opa\/pr\/united-states-intervenes-false-claims-act-lawsuit-against-drug-maker-mallinckrodt-alleging\">announced that it filed a complaint<\/a> under the False Claims Act against Mallinckrodt ARD LLC, alleging that the company (also previously known as Questcor Pharmaceuticals Inc) engaged in conduct that violated the False Claims Act by using a foundation as a way to pay kickbacks in connection with its drug H.P. Acthar Gel (Acthar) from 2010 through 2014. The next day, the company announced a settlement to resolve some of the claims outlined in the False Claims Act complaints against it.<\/p>\n<p><strong>DOJ Intervention and New Complaint<\/strong><\/p>\n<p>The government alleges that Mallinckrodt used a foundation as a conduit to pay illegal kickbacks via copay subsidies for Acthar so it could market the drug as \u201cfree\u201d to doctors and patients while increasing its price. Mallinckrodt allegedly paid these illegal subsidies through three funds to a foundation that the company had set up to pay only Medicare copays for Acthar, at the exclusion of other drugs.<\/p>\n<p>The government alleges that Mallinckrodt then routed patients with Acthar prescriptions to these funds, of which Mallinckrodt allegedly made continuing payments as the sole \u201cdonor.\u201d The government alleges that the Company paid these subsidies to induce Medicare-reimbursed purchases of Acthar at it continued to raise the price, and used the subsidies to counteract doctor and patient concerns about the drug\u2019s high cost and to market the drug as \u201cfree.\u201d<\/p>\n<p>The <a href=\"https:\/\/www.justice.gov\/usao-edpa\/pr\/united-states-files-lawsuit-against-drug-maker-jacked-drug-prices-50-32000\">government further alleges<\/a> that since 2001, Mallinckrodt raised the price of Acthar from roughly $50 to over $32,200 per 5 milliliter vial by the end of 2014.<\/p>\n<p>\u201cDrug companies are not allowed to pay patients\u2019 co-pays.\u00a0That rule is designed to prevent the very thing Mallinckrodt allegedly did here \u2013 outrageously jack up Acthar\u2019s price and leave the government with the entire bill,\u201d <a href=\"https:\/\/www.justice.gov\/usao-edpa\/pr\/united-states-files-lawsuit-against-drug-maker-jacked-drug-prices-50-32000\">said U.S. Attorney William M. McSwain<\/a>, in announcing the lawsuit. \u201cWe will not allow drug companies to use so-called charitable patient assistance funds to do what they otherwise are not allowed to do.\u00a0That\u2019s an illegal kickback and undermines the viability of Medicare Part D, which our nation instituted to help seniors cover prescription drug costs.\u201d<\/p>\n<p>Mallinckrodt has <a href=\"https:\/\/www.prnewswire.com\/news-releases\/mallinckrodt-announces-agreement-in-principle-with-us-department-of-justice-on-legacy-questcor-sales-and-marketing-activities-responds-to-government-civil-litigation-involving-legacy-questcor-charitable-foundation-activities-300862631.html\">defended its actions<\/a>, saying, \u201cContrary to the DOJ’s characterizations in the complaint, the\u00a0allegations relate\u00a0to legacy Questcor\u00a0conduct as all the\u00a0donations to the Chronic Disease Fund (CDF) referenced in the complaint occurred prior to the\u00a0acquisition of Questcor or were for grandfathered patients who had been approved by CDF for co-pay assistance prior to the acquisition.\u201d<\/p>\n<p><strong>Expected Settlement<\/strong><\/p>\n<p>One day after the DOJ announced it was intervening in two <em>qui tam <\/em>cases filed against Mallinckrodt, the company announced that it expects to pay $15.4 million to resolve some of the claims outlined in the <em>qui tam <\/em>suits and the DOJ complaint. The $15.4 million settlement <a href=\"https:\/\/www.cnbc.com\/2019\/06\/05\/mallinckrodt-expects-to-pay-15-million-to-settle-doj-drug-bribing-probe.html\">would not cover any allegations relating to Questcor\u2019s charitable foundation activities<\/a>, only the company\u2019s sales and marketing activities. Therefore, the lawsuit regarding activities surrounding the patient assistance charity remains active.<\/p>\n<p>“Mallinckrodt\u00a0looks forward to finalizing our settlement agreement with the government relating to legacy Questcor sales and marketing activities. As we have said repeatedly, where we can resolve legacy legal matters in a reasonable and manageable way, we will do so,” <a href=\"https:\/\/www.prnewswire.com\/news-releases\/mallinckrodt-announces-agreement-in-principle-with-us-department-of-justice-on-legacy-questcor-sales-and-marketing-activities-responds-to-government-civil-litigation-involving-legacy-questcor-charitable-foundation-activities-300862631.html\">said\u00a0Mark Casey, Mallinckrodt General Counsel<\/a>. “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. We are confident that the litigation process will focus the contested issues and be a productive step in reaching resolution.”<\/p>\n<p>The terms of the settlement are still being worked out, but it is expected that they will not include any admission of wrongdoing on behalf of Mallinckrodt.<\/p>\n<p><strong>Conclusion <\/strong><\/p>\n<p>Mallinckrodt is no stranger to controversy and investigations, as the <a href=\"https:\/\/www.ftc.gov\/news-events\/press-releases\/2017\/01\/mallinckrodt-will-pay-100-million-settle-ftc-state-charges-it\">company previously agreed to pay $100 million<\/a> to settle charges from the United States Federal Trade Commission that the company violated antitrust laws when Questcor acquired the rights to a competing drug that threatened its monopoly in the United States for adrenocorticotropic hormone drugs.<\/p>\n<p>In January 2019, the company also <a href=\"https:\/\/oversight.house.gov\/news\/press-releases\/oversight-committee-launches-sweeping-drug-price-investigation\">received a letter<\/a> from the United States House Committee on Oversight and Reform, which requested information relating to its pricing strategy for Acthar.<\/p>\n<p>The ongoing lawsuit is likely to bring an additional settlement from Mallinckrodt, time will tell if it will be resolved in the finalization of the $15.4 million settlement reached, or if it will continue on for weeks or months to come.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>01On June 5, 2019, the United States Department of Justice (DOJ) announced that it filed a complaint under the False Claims Act against Mallinckrodt ARD LLC, alleging that the company (also previously known as Questcor Pharmaceuticals Inc) engaged in conduct that violated the False Claims Act by using a foundation as a way to pay […]<\/p>\n","protected":false},"author":1,"featured_media":12372,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[25,55],"tags":[1101],"class_list":["post-12371","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-doj","category-false-claims-act","tag-new"],"_links":{"self":[{"href":"https:\/\/www.policymed.com\/wp-json\/wp\/v2\/posts\/12371","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.policymed.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.policymed.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.policymed.com\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.policymed.com\/wp-json\/wp\/v2\/comments?post=12371"}],"version-history":[{"count":1,"href":"https:\/\/www.policymed.com\/wp-json\/wp\/v2\/posts\/12371\/revisions"}],"predecessor-version":[{"id":12373,"href":"https:\/\/www.policymed.com\/wp-json\/wp\/v2\/posts\/12371\/revisions\/12373"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.policymed.com\/wp-json\/wp\/v2\/media\/12372"}],"wp:attachment":[{"href":"https:\/\/www.policymed.com\/wp-json\/wp\/v2\/media?parent=12371"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.policymed.com\/wp-json\/wp\/v2\/categories?post=12371"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.policymed.com\/wp-json\/wp\/v2\/tags?post=12371"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}