- Mallinckrodt is leaving the pharmaceutical industry's largest trade group ahead of membership requirement changes that might have led to the drugmaker's ousting.
- The big medicines developer decided on Monday to exit PhRMA, The Wall Street Journal's Joseph Walker first reported. The departure foreshadowed proposed reforms to the trade group's bylaws that could take effect as early as next month and would require members to double down on research, according to a source familiar with the matter cited by The Journal.
- Such a reform would fall in line with recent work PhRMA has done to improve the industry's image. In February, it rolled out the Go Boldly campaign, which showcases drugmakers' focus on R&D rather than pricing and which the group plans to spend at least $20 million on each year.
A PhRMA spokesperson confirmed Mallinckrodt's exit to BioPharma Dive, adding in a statement, "[t]he review of our membership criteria is still ongoing and we will have something to share on this in early May."
Though it's unclear what specific research requirements would take hold under the revised membership rules, Mallinckrodt's choice to strike first indicates the company wasn't particularly confident that it would meet them. The big pharma reported $3.38 billion in net sales and $262 million in R&D spending in its latest 10-K filing with the Securities and Exchange Commission.
Mallickrodt did not return request for comment.
“Mallinckrodt routinely evaluates its engagement in trade associations and policy organizations and has concluded that the significant financial and time commitment required as a full PhRMA member outweighs its direct policy value to us at this time,” the company said in a statement to The Wall Street Journal.
PhRMA's scrutiny of controversial members could have also prompted Mallinckrodt's departure. The trade group is currently evaluating Marathon Pharmaceuticals' membership after the drugmaker decided to price its Duchenne muscular dystrophy medication Emflaza (deflazacort) at 89,000 a year — opening the flood gates to Congressional and consumer backlash.
Mallinckrodt would also fit the bill of a controversial member, especially recently. Earlier this week, the company forked over $35 million to settle federal investigations into suspicious orders and manufacturing concerns related to its painkillers, although Mallinckrodt admitted no wrongdoing in the case. And the specialty pharma has come under scrutiny for its drug Acthar gel.