The Washington County (Maryland) Board of Education has filed a lawsuit against pharmaceutical company Mallinckrodt ARD Inc. (“Mallinckrodt”), alleging that Mallinckrodt engaged in an unjust, unfair, and deceptive scheme and conspiracy along with its exclusive distributor, Express Scripts, to artificially inflate the price of Acthar, a prescription drug manufactured by Mallinckrodt that is used to treat infantile spasms and multiple sclerosis.
Mallinckrodt purchased the rights to Acthar in 2001. Acthar is not available in pharmacies and sold only through Express Scripts. The formulation of Acthar has not changed since 2001. In 2018, Acthar represented 35 percent of Mallinckrodt’s $3.2 billion in net sales.
Mallinckrodt had entered into an agreement in 2007 with Express Scripts, giving Express Scripts the exclusive distribution rights to Acthar in exchange for Mallinckrodt’s promise to raise the price of Acthar. The price of Acthar increased more than 1,300% in 2007, after the exclusivity agreement was reached, from about $2,000 to $23,000 for a single vial. In April 2019, the price per vial was $38,892.
Two of the plaintiff school board’s teachers are prescribed Acthar. The school board paid $2.8 million between 2016 and 2018 on prescriptions for Acthar. The school board’s lawsuit alleges violations of the Maryland Consumer Protection Act, negligent misrepresentation, fraud, unjust enrichment, and conspiracy to commit fraud.
Mallinckrodt was formerly Questcor Pharmaceuticals Inc. (“Questcor”). Questcor stargtegically outbid other competitors for a synthetic alternative to Acthar (Synacthen) in 2013, which has no competing drug sold in the United States, and then failed to distribute the synthetic drug. Since the purchase, the price for Acthar continued to rise.
Mallinckrodt reached a $100 million settlement with the Federal Trade Commission and five states, including Maryland, in 2017, in which Mallinckrodt agreed to license Synacthen to a competitor. Nonetheless, Synacthen has not been marketed and Acthar remains the sole drug for patients.
Source Washington County Board of Education v. Mallinckrodt ARD Inc. et al., 1:19-cv-01854.
What is Acthar?
Mallinckrodt describes Acthar on its website as follows:
Acthar is a prescription medicine for flares or on a regular basis (maintenance) in people with dermatomyositis or polymyositis (DM-PM).
Acthar is a prescription medicine for flares or on a regular basis (maintenance) in people with systemic lupus erythematosus (lupus).
Acthar is a prescription add-on medicine for the short-term administration (to tide patients over an acute episode or exacerbation) in: psoriatic arthritis (PsA); rheumatoid arthritis, including juvenile rheumatoid arthritis (selected cases may require low-dose maintenance therapy); ankylosing spondylitis.
Acthar is injected beneath the skin or into the muscle.
Mallinckrodt states on its website:
Since acquiring Acthar Gel in 2014, Mallinckrodt has invested more than $500 million into the drug, specifically: building on substantial clinical experience as well as previously completed and largely independent clinical case series and smaller trials; modernizing manufacturing; expanding medical affairs and research activities; and initiating seven well-designed, company-sponsored randomized, controlled clinical studies, targeting combined enrollment of nearly 1,100 patients.
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