More trouble for Mallinckrodt: DOJ joins the fray in Acthar whistleblower suits

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Mallinckrodt will square off against federal prosecutors in two whistleblower suits against Questcor, which the company acquired in 2014. (Pixabay)

Mallinckrodt is no stranger to legal challenges, having fought through payer lawsuits on its extravagant price hikes and federal subpoenas for its sale of powerful opioids. Facing claims an acquired company paid off doctors for scripts, the drugmaker will now square off against the feds once again.

The U.S. Justice Department joined a pair of whistleblower suits alleging Questcor Pharma, acquired by Mallinckrodt in 2014, paid doctors to boost sales of its controversial H.P. Acthar Gel and retaliated against employees who threatened to blow the company’s cover.

A newly unsealed complaint alleges Questcor ran a “high-tiered strategy” to illegally market Acthar through “deceptive, false and misleading methods” and defrauded government healthcare programs through false claims.

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Mallinckrodt said it is negotiating with the feds on a settlement and expects to reach an agreement quickly.

“Mallinckrodt has cooperated fully with the DOJ in its review of this historical conduct, voluntarily providing documents and information to the government,” the company said in an emailed statement. “While we are disappointed the DOJ has elected to proceed with the lawsuit, we have been in advanced settlement talks with the government over the past several months.”

RELATED: Mallinckrodt used 'dirty data' to snow payers on Acthar, whistleblower suit says

Federal prosecutors' decision to join in adds weight to the whistleblower allegations, which first surfaced in 2012. The lawsuits say Questcor cultivated a culture of impropriety around its Acthar marketing, including using “dirty data” to mislead payers.

Whistleblowers also allege the company retaliated against them after sham internal investigations turned up no wrongdoing.

Rasvinder Dhaliwal, a former associate director of market access for Questcor, said in a separate whistleblower suit—which the government has not joined—that she was fired and intimidated by company officials after bringing her concerns to management.  

RELATED: Mallinckrodt stifled Acthar competition, payer lawsuit claims, clearing path for 85,000% rise in prices

The renewed scrutiny on Questcor’s marketing strategy is just one of a slew of black marks for Acthar, which was previously targeted for its exorbitant price hikes.

In a payer lawsuit filed in October 2017, Medicare Advantage organizations accused Questcor and Mallinckrodt of sidelining a potential Acthar challenger to avoid competition and hiking the price of the drug to $34,000 from $40 per vial over the course of six years, an 850-fold increase.

The payer suit followed a $100 million settlement with the Federal Trade Commission that investigated claims that Questcor bought out competitor Synacthen Depot to hike Acthar’s price.

RELATED: Mallinckrodt subpoenaed, again, over sales of oxymorphone in growing opioid crisis

The DOJ's complaint against Mallinckrodt is not the company’s first run-in with federal prosecutors.

In February 2018, the company was hit with a subpoena from U.S. prosecutors in Florida requesting information on the company’s sales of its oxymorphone generics. A year earlier, Mallinckrodt settled with the DOJ for $35 million after massive diversions of the company’s opioids were reported on the streets of Florida

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