Georgia city sues Mallinckrodt for 'unconscionable' drug price hikes

The city of Marietta, Ga., is suing Mallinckrodt, claiming the drugmaker illegally blocked competition and charged "exorbitant" and "unconscionable" prices for its drug, Acthar.

Acthar was originally approved in 1979 to treat multiple sclerosis, but now is used to treat a variety of diseases, including lupus, rheumatoid arthritis and a seizure condition in infants, according to the lawsuit.

Mallinckrodt acquired Questcor Pharmaceuticals in 2014, and along with it gained the rights to Achtar. The drug started at $40 a vial. Over the years, Mallinckrodt  raised the price of Acthar several times, and the drug now costs more than $39,000 per vial. A typical treatment course takes at least three vials, according to the lawsuit, which was filed Feb. 6. 

Marietta has a self-funded healthcare plan for its residents and said in the lawsuit that it has had to pay more than $2 million to cover the cost of the drug for just one patient. 

The city's lawsuit accuses Mallinckrodt of preventing competition by acquiring Synacthen, the generic, cheaper version of Acthar, then refusing to sell it for the lower price. 

The class-action suit for unjust enrichment seeks actual and punitive damages for third-party insurers, their beneficiaries and people without insurance who paid for Acthar over the last several years. 

In a statement to Becker's Hospital Review, a Mallinckrodt spokesperson said the drugmaker has not been served with the lawsuit. 

"Under Mallinckrodt’s stewardship, any price adjustments to Acthar have been limited to the mid-single digit percentage range. Mallinckrodt offers significant discounts to many payers and customers, abides by a public pricing pledge and offers a range of free drug and commercial copay assistance options for patients, in compliance with applicable laws," the spokesperson added. 

The lawsuit also cites a separate case filed last year by the U.S. Justice Department that accused Mallinckrodt of giving physicians illegal kickbacks to prescribe Acthar. Mallinckrodt paid more than $15 million to settle those claims. 

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