Dive Brief:
- Mallinckrodt confirmed Wednesday evening that it has entered into a settlement agreement with the Federal Trade Commission regarding pricing actions by Questcor, a company it acquired in 2014 for $5.6 billion.
- Questcor reportedly increased the price of its best-selling drug Acthar Gel by 85,000%, from $40 in 2001 to $34,000 per vial currently.
- In an effort to maintain a monopoly, Questcor acquired a competing product from Novartis in 2013 and shelved its development.
Dive Insight:
Mallinckrodt says it "strongly disagrees with the allegations," adding that the "key claims are unsupported and even contradicted by scientific data and market facts."
Mallinckrodt has agreed to pay $100 million in fines to the FTC and the five states involved in the investigation, including $2 million for each states’ legal fees. The company is required to pay $90 million of the fine within 10 business days.
The company also agreed to out-license the rights to Synacthen Depot, the competing Novartis product in question, to Marathon Pharmaceuticals, which will develop the drug in hopes of Food and Drug Administration approval in two indications — infantile spasms and nephrotic syndrome.
"Removing the distraction of litigation enables us to focus on advancing our increasingly diversified portfolio of medicines for the benefit of patients," the company said in a statement.
"The resolution also allows us to retain the rights to continue manufacturing and marketing Synacthen Depot to patients in other countries around the world where we already have rights. And, more importantly, we can continue to develop the product for all other indications in the U.S. except IS and NS, including our recently announced trial to explore its potential use for patients suffering from DMD."
Mallinckrodt intends to develop Synacthen Depot as a treatment for Duchenne muscular dystrophy. The drugmaker contends that there are high barriers to entry in the U.S. market for a product of this type and that any company will have to do a full slate of clinical trials on the product to bring it to market.
"Questcor took advantage of its monopoly to repeatedly raise the price of Acthar, from $40 per vial in 2001 to more than $34,000 per vial today — an 85,000 percent increase," said FTC Chairwoman Edith Ramirez.
"We charge that, to maintain its monopoly pricing, it acquired the rights to its greatest competitive threat, a synthetic version of Acthar, to forestall future competition. This is precisely the kind of conduct the antitrust laws prohibit," she said in a statement issued by the FTC.