Two whistleblowers at Mallinckrodt, a pharmaceutical company responsible for one of the largest drug price increases in U.S. history, claim the company bribed doctors and their staff to boost sales.
In a lawsuit against the company, the two whistleblowers said the effort was part of an engineered “multi-tiered” strategy by Questcor Pharmaceuticals, now Mallinckrodt, to increase sales of H.P. Acthar Gel. The strategy, they said, cheated the government out of millions of dollars.
The price of the drug, which is used to treat infant seizure disorder, increased 97,000% from $40 to $39,000 per vial over the last 19 years.
The drugmaker has been accused of bribing doctors. When that failed, the alleged bribed the office staff to sell its drug with free trips, gift cards, lavish dinners and sponsored happy hours.
The Justice Department has now gotten involved in the case after conducting its own investigation.
The company’s aggressive sales push in multiple sclerosis, rheumatoid arthritis and other areas combined with the soaring price of the drug pushed annual sales to more than $1 billion.
According to a CNN investigation, many of Acthar’s sales were driven by Medicare reimbursements. The investigation found that Medicare spending on Acthar rose more than tenfold over the last six years to $2 billion.
In their lawsuit, the whistleblowers accuse the company of cheating the federal government “out of millions of dollars” that shouldn’t have been paid.
Questcor was purchased by Mallinckrodt in 2014 as part of a $5.6 billion deal. Questcor’s illegal practices, the whistleblower claimed, had been going on since 2007. They claim that those practices continued after the merger and acquisition.
If Mallinckrodt is found liable, it may be required to pay up to three times the amount of money the government is found to be defrauded on top of $5,500-$11,000 in penalties.