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Tuesday, August 20, 2019

Federal government alleges Mallinckrodt ARD paid kickbacks in connection to drug

Lawsuits

By Carrie Bradon | Jul 16, 2019


PHILADELPHIA (Legal Newsline) – The United States filed a complaint against Mallinckrodt ARD LLC in the U.S. District Court for the Eastern District of Pennsylvania, alleging that the defendant violated the False Claims Act. 

The U.S. Department of Justice announced the lawsuit on June 5.

The U.S. claims that the defendant used a foundation as a conduit in order to pay kickbacks in the form of copay subsidies for one of its drugs, H.P. Acthar Gel, from 2010 to 2014. The defendant's alleged actions were in direct contradiction to the Federal Anti-Kickback Statute, which prohibits pharmaceutical companies from offering or paying to encourage Medicare patients to purchase their drugs, which extends to the payment of copay obligations.

In addition to offering subsidies, Mallinckrodt allegedly also made payments as the sole donor to these funds in order to continue subsidizing the Medicare copays on the drug to increase sales. The defendant allegedly increased the price of the drug from $50 to more than $32,500 per 5-milliliter vial.

"Medicare rules are designed to protect beneficiaries and taxpayer dollars," said Maureen R. Dixon, special agent in charge of the Philadelphia Regional Office of the Inspector General, Department of Health and Human Services, in a press release. "HHS-OIG and the U.S. Attorney's Office will continue to work together to fight health care fraud and investigate allegations of co-pay and kickback violations."

The case is being managed by the Civil Division's Commercial Litigation Branch and the U.S. Attorney's Office for the Eastern District of Pennsylvania.

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