Feds target Mallinckrodt after joining Medicaid rebate suit worth ‘hundreds of millions’

Amid efforts to close a $1.6 billion opioid settlement, Mallinckrodt has fought tooth and nail to escape a massive Medicaid rebate bill for its controversial H.P. Acthar Gel. Instead of ceding ground, the U.S. government opted to take the fight right back to Mallinckrodt––and it could create even more trouble for the embattled drugmaker.

The federal government has joined a False Claims Act whistleblower suit filed in Boston accusing Mallinckrodt of underpaying Medicaid rebates for Acthar by “hundreds of millions of dollars,” the U.S. Attorney’s Office for the District of Massachusetts said in a release Tuesday.

The government accused Mallinckrodt, which purchased Acthar-maker Questcor Pharma in 2013, of refusing to pay “inflationary rebates” on Acthar despite raising the price of the drug 85,000% between 2001 and 2017. Under the Medicaid Drug Rebate Statute, drugmakers are required to pay back the difference between a drug’s price increase each year and the rate of inflation, the attorney’s office said. 

Federal prosecutors accused Mallinckrodt of repeatedly refusing to pay past-due rebates dating to 2013 and earlier despite warnings it “could not ignore Acthar’s pre-2013 price increases when paying Medicaid rebates for the drug.”

A Mallinckrodt spokesman could not be reached for comment. 

RELATED: See you in court: Mallinckrodt takes on feds to fight $600M in back Acthar rebates