Mallinckrodt Pharmaceuticals announced today that the company expects to pay $15.4 million in a settlement with the U.S. Justice Department after allegations that Questcor Pharmaceuticals, which Mallinckrodt acquired in 2014, had bribed doctors and their staff to prescribe an incredibly expensive drug.
Two whistleblowers came forward in April to accuse Questcor of trying to boost profits for Acthar, a medication primarily for infants with seizures. Questcor raised the price of the medication by almost 100,000 percent (not a typo) from just $40 in 2000 to $38,892 today, despite the fact that Acthar has been on the market since 1952. Mallinckrodt currently rakes in about $1 billion per year from Acthar, according to CNN.
“Mallinckrodt denies any wrongdoing on the part of Questcor during the relevant period, and intends to vigorously defend the company in this matter,” the company said in a press release.
Mallinckrodt has previously pointed out that the drug price of Acthar was raised by Questcor before Mallinckrodt bought it. But that doesn’t change the fact that Questcor appears to have been purchased by Mallinckrodt precisely because it was making money hand over fist.
Nor does it change the fact that about $8,000 of the price hikes on Athcar have reportedly occurred since Mallinckrodt bought Questcor. And the $15.4 million fine, which has yet to be finalized with the DOJ, pales in comparison to how much money the company is currently taking in on the drug.
While the company denies wrongdoing, the whistleblower lawsuit alleges that the “illegal practices that Questcor had been engaging in since 2007 have knowingly been continued since the merger and acquisition of Questcor by Mallinckrodt.”
Acthar is used for infantile spasms, which afflict roughly 2,000 babies in the U.S. each year, but Mallinckrodt has expanded the use of Acthar for other ailments like rheumatoid arthritis. A 60 Minutes report from May of 2018 raised serious questions about how well the drug actually works for arthritis in seniors, and an expert who spoke with 60 Minutes said that there’s “no evidence” Acthar works for rheumatoid arthritis despite the fact that Mallinckrodt reportedly makes about $500,000 each year for prescriptions treating the condition.
Curiously, there’s a drug called Synacthen that’s identical to Acthar and sells for just $33 in Canada. So why isn’t Synacthen available in the U.S.? Because Mallinckrodt bought the U.S. rights to Synacthen and simply doesn’t make it available to American consumers.
But this development isn’t just about drug prices; it’s about alleged bribery. Needless to say, other people often get prison time for bribery offenses. Recently, a Minnesota man got 29 months for trying to bribe a witness in a burglary case, a Texas prison guard got two years in prison for taking bribes, and a New York businessman got four years for repeatedly bribing New York cops. An Oregon man who recently tried to get his wife deported by bribing an ICE agent got four months in federal prison.
But America’s largest businesses really do play by a different set of rules. Especially when those businesses are drug companies that can charge whatever they want and yet face no real consequences. Mallinckrodt’s CEO, Mark Trudeau, made $14 million last year, which means that he makes almost enough in just one year to pay the company’s settlement.
Don’t print off your “Fuck Mallinckrodt” bumper stickers just yet, though. Mallinckrodt announced in April that it plans to change its name to Sonorant Therapeutics at some point in the near future. At this point, it almost feels like a deliberate game when a shady company keeps changing its name through mergers, acquisitions, and plain old fuckery.
From Monsanto to Philip Morris to Blackwater, ethically challenged companies always seem like they’re trying to blend in with the wallpaper.
Correction: This article originally stated that the price of Acthar had gone “from just $40 in 2000 to over $40,000 today.” A spokesperson for Mallinckrodt emailed to request a correction that Acthar actually costs $38,892 today. Gizmodo regrets the error. We also regret that every last one of these guys isn’t in prison yet.