Illinois city sues Mallinckrodt over price of hormone drug: 4 takeaways

The city of Rockford, Ill., filed a lawsuit April 6 against Mallinckrodt Pharmaceuticals over the price of its hormone drug, H.P Acthar, reports Business Insider.

Here are four things to know.

1. Rockford manages its own health plan for hundreds of city workers, including policemen and firefighters. In 2015, the city realized two babies treated with Acthar for infantile spasms accounted for 2.5 percent of the health plan's $20 million budget, according to the report. The city and its employees spent nearly $500,000 on Acthar, representing a gross cost of $54,339.76 per vial, according to the lawsuit.

2. Acthar hit the market in the early 1950s. Along with infantile spasms, the drug is also used to treat flare-ups related to multiple sclerosis and other autoimmune disorders. While Acthar used to cost $40 per dose, the drug now costs up to $36,000 per dose, according to the report.

3. Rockford on April 6 filed a lawsuit against Mallinckrodt "to challenge an anti-competitive, unfair and deceptive scheme" the company made to maintain its monopoly on Acthar, according to the suit. The city wants Mallinckrodt to refund the $500,000 it spent on Acthar. Rockford Mayor Larry Morrissey also hopes the case will help lower the price of the drug in case the city needs to purchase it again.

4. Mallinckrodt in January agreed to pay $100 million to settle Federal Trade Commission claims the drugmaker violated antitrust laws and illegally raised the price of Acthar.

"We will not comment on the details of this litigation, however we can reiterate our publicly expressed view related to the FTC settlement," a Mallinckrodt spokeswoman told Becker's Hospital Review via email. "Mallinckrodt strongly disagreed with allegations that the company engaged in anti-competitive behavior."

Editor's note: This article was updated on April 24 to include a statement from Mallinckrodt.

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