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Drug Manufacturer Fined for Unfairly Raising Prices

Published on Feb 7, 2017 at 12:00 pm in Dangerous Drugs.

A recent settlement shocked the pharmaceutical world as the drug maker Mallinckrodt has agreed to pay a $100 million fine to settle Federal Trade Commission charges for taking illegal action to maintain its monopoly of a specialty drug for infants.  H.P. Acthar Gel is an adrenocorticotropic hormone drug prescribed to treat infantile spasms, a rare seizure disorder affecting infants.  It is also used as a life-saving last-resort for other serious medical conditions, including multiple sclerosis.

The deal was reached with the Federal Trade Commission and the states of Alaska, Maryland, New York, Texas, and Washington.  Mallinckrodt must pay the fine and allow a competitive drug alternative to be produced.  A spokesperson for the New York Attorney General Eric Schneiderman who was involved in the settlement said that Mallinckrodt’s U.S. subsidiary, formerly known as Questcor Pharmaceuticals Inc., purchased Acthar in 2001 and began to raise the price.  Acthar went from costing $40 a vial to more than $34,000 a vial, an 85,000% increase.  Today, a single dose for treatment costs well above $100,000.

Questcor took illegal actions to prevent other drug companies from introducing similar drugs in U.S. markets.  Synacthem, a drug used in the same medical situations, was purchased by Questcor in 2013, virtually eliminating all competition.  Schneiderman said in a statement, “This is an egregious case of a monopolist doing a deal to eliminate potential competition and keep its power over pricing.  This settlement will restore the competition that was prevented by Questcor’s illegal actions.”

Mallinckrodt issued a statement that said, “We are pleased to confirm that we have entered into a settlement agreement with the FTC staff to fully resolve this matter, subject to approval by the commission.  We will comment further at the appropriate time.”

Recent arguments made during the U.S. presidential campaign by Donald Trump and presidential hopefuls Hilary Clinton and Bernie Sanders have drawn recent nationwide attention to the dramatic price increasing behavior of many of America’s pharmaceutical manufacturers.  While it is not illegal for companies to drastically raise the prices of their products, pharmaceutical companies are legally required to make their products financially accessible to the individuals that need them.

If you wish to learn more about drug litigation and the legal responsibilities of prescription drug manufacturers, contact Thomas Law Offices for more information.  Tad Thomas, Louisville, KY drug litigation lawyer, and his staff are dedicated to seeing that drug companies produce safe and accessible products.