Pharmaceutical company Mallinckrodt ARD, LLC (formerly known as Mallinckrodt ARD, Inc. and previously Questcor Pharmaceuticals, Inc.), has agreed to pay $233,707,865 as part of a settlement to resolve allegations that from 2013 until 2020, it knowingly underpaid Medicaid rebates that resulted from its price increases for the drug H.P. Acthar Gel (Acthar), in violation of the False Claims Act. In March 2020, the government filed a complaint detailing these allegations and how Mallinckrodt unlawfully required Medicaid programs to foot the bill for an increase in price from $50 per vial to $28,000 per vial, as though a new version of Acthar came on the market in 2013, when in fact, it did not. Mallinckrodt’s payment of approximately $233.7 million includes approximately $123.6 million to the United States and approximately $110.1 million to several states, pursuant to the terms of separate settlement agreements Mallinckrodt has or will enter into with those states. In October 2020, Mallinckrodt filed for bankruptcy protection and the United States Bankruptcy Court for the District of Delaware has approved Mallinckrodt’s settlement with the government.
In connection with the settlement, Mallinckrodt also entered a five-year corporate integrity agreement (CIA) with the Department of Health and Human Services Office of Inspector General (OIG). The CIA contains unique drug price transparency provisions and monitoring provisions focused on Medicaid rebate and patient assistance program activities. The CIA also requires Mallinckrodt to establish a risk assessment program, implement executive recoupment provisions and obtain compliance related certifications from company executives and board members.
