Mallinckrodt Pays $260 Million on False Claims Violations
Mallinckrodt has agreed to pay $260 million to resolve allegations that it violated the False Claims Act by knowingly underpaying Medicaid rebates due for its drug H.P. Acthar Gel, and using a foundation as a conduit to pay illegal co-pay subsidies for the product in violation of the Anti-Kickback Statute. As part of the settlement, Mallinckrodt also entered a five-year corporate integrity agreement that “contains unique drug price transparency provisions and monitoring provisions focused on Medicaid rebate and patient assistance program activities,” according to a Justice Department release. It also requires the company to establish a risk assessment program, implement executive recoupment provisions, and obtain compliance related certifications from company executives/board members.
“Drug company schemes to undermine Medicaid and Medicare payment rules harm these critical taxpayer-funded health programs,” HHS chief counsel Gregory E. Demske is quoted in the release as saying. “Under this CIA, OIG will scrutinize Mallinckrodt’s Medicaid rebate practices and Mallinckrodt will be required to provide advance public notice of price increases for Acthar and other drugs.”