Mallinckrodt Sued Over Rebate Issue After New Indication

The U.S. government has filed a False Claims Act suit in Massachusetts federal court against Mallinckrodt ARD (previously Questcor Pharmaceuticals) for allegedly underpaying Medicaid rebates caused by large increases in the pricing for its drug H.P. Acthar Gel. The government’s complaint alleges that despite Acthar being first marketed long before 1990, Mallinckrodt began calculating and paying rebates as if Acthar was a new drug first marketed in 2013, which was after FDA approved the product for a new indication — infantile spasms. “Given that Questcor had raised Acthar’s price by more than $20,000 per unit prior to 2013, the government alleges that Questcor, and later Mallinckrodt, avoided paying inflationary rebates on any of those pre-2013 price increases, and has thus underpaid hundreds of millions of dollars at the expense of American taxpayers,” the government contends.