Mallinckrodt, a pharmaceutical company previously known as Questcor Pharmaceuticals, has the dubious distinction of prompting one of the largest drug price increases in U.S. history. The company raised the price of H.P. Acthar Gel (used to treat an infant seizure disorder) from $40 in 2000 to nearly $39,000 today — a 97,000 percent increase.
Now, a pair of whistleblowers from the company say Mallinckrodt frequently bribed doctors and medical staff to increase sales of the drug, scamming the federal government out of millions of dollars. The whistleblowers’ allegations were bolstered when the U.S. Department of Justice decided to intervene after conducting its own investigation.
Claimants allege serious fraud
The whistleblowers described a scheme in which the company would use any measures to sell the drug, including bribing doctors and lying to the Food and Drug Administration (FDA). Its fraudulent schemes combined with its massive price increase have pushed annual sales for the drug over $1 billion.
Most of these sales were driven by Medicare reimbursements. Medicare spending on the drug has risen more than tenfold over the last six years alone.
Questcor was accused of a massive kickback scheme and illegal promotion of the drugs, along with making false statements to the FDA and directing employees to conceal evidence of the fraudulent activity. The whistleblowers clam the company “cheated the federal government out of millions of dollars that should not have been paid.”
The case is still ongoing, but is likely to involve a massive judgment or settlement. For more information on the steps you should take to blow the whistle on wrongdoing in your business or organization, consult a dedicated attorney with Kardell Law Group.