Mallinckrodt to settle drug rebate, kickback suits for $260M

Mallinckrodt has agreed to pay $260 million to resolve allegations it violated the False Claims Act, the Justice Department said March 7.

The settlement resolves allegations that the drugmaker knowingly underpaid Medicaid rebates for Acthar Gel medication between 2013 and 2020 and used a foundation as a conduit to pay illegal kickbacks to patients in the form of co-pay subsidies for the drug. This allowed the drugmaker to market the medication as "free" to patients and physicians while increasing its price, the Justice Department alleged.

Mallinckrodt also entered a five-year corporate integrity agreement with HHS' Office of Inspector General, which involves certain provisions regarding drug price transparency, Medicaid rebates and patient assistance programs. 

The agreement requires the drugmaker to create a risk assessment program, implement provisions on executive recoupment and ensure company executives and board members complete compliance-related certifications.

Mallinckrodt did not admit liability as part of the settlement. 

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