Philadelphia, PA (WorkersCompensation.com) – The U.S. Department Of Justice has announced that drug company Mallinckrodt will pay out $15.4 Million to resolve allegations that one of its subsidiaries Questcor provided extravagant entertainment and dinners to physicians in exchange for prescriptions written for one of its products, H.P. Acthar Gel.
Acthar Gel is a repository corticotropin injection that is used in the treatment of Lupus, Sarcoidosis, and MS. The DOJ asserts that the kickbacks for prescriptions for Acthar Gel occurred between 2009 and 2013. This resulted in alleged violation of Anti-Kickback Statute, and ultimately submissions of false claims.
The Federal Anti-Kickback Statute bans drug companies from offering any type of renumeration in exchange for inducing healthcare providers to prescribe a medication that is reimbursed by a federal healthcare program, including Medicare.
The allegations were originally alleged in two cases filed under the whistleblower, or qui tam, provision of the False Claims Act. However, the settlement announced last week does not resolve those claims. Instead, the government is continuing to pursue the claims that Mallinckrodt violated the False Claims Act by using a foundation as a conduit to pay illegal kickbacks in the form of copay subsidies for Acthar.
Additionally, in June of this year, a Federal lawsuit was filed against Mallinckrodt for price gouging of the Acthar Gel. In 2001, the price of the drug was $50. By 2014, Mallinckrodt raised the price to $32,000. The allegations in the lawsuit state that the company also used a foundation to subsidize copays for Acthar Gel so that they could market the drug as free to medical providers.
This isn’t the first time that Mallinckrodt has been under the legal radar. In January of this year, WorkersCompensation.com reported that the drug company was being sued by the Alaskan Attorney General Kevin G. Clarkson for minimalizing the risk and side effects of opioids. According to the WorkersComensation.com report, Mallinckrodt is one of the largest manufacturers of opioids in the country and accounts for 25 percent of the quota that the Drug Enforcement Administration allows.
In 2017, Mallinckrodt paid $35 Million in settlement for failure to report suspicious drug prescriptions and gross negligence in records violations.