Mallinckrodt Agrees to Pay $234 Million to Settle False Claims Act Case

BOSTON, March 7, 2022 /PRNewswire/ — The Whistleblower Law Collaborative LLC is pleased to announce that the United States, individual states, the District of Columbia, and Puerto Rico have settled a False Claims Act case brought by its client James Landolt against Mallinckrodt plc and its subsidiary Mallinckrodt ARD LLC for knowingly underpaying Medicaid rebates for its drug Acthar. Mallinckrodt will pay a total of $233,707,865 (plus interest) in eight installments: the United States will receive $123,642,146 and the Medicaid Participating States will receive $110,065,718. In addition, Mallinckrodt has entered into a Corporate Integrity Agreement.

Mr. Landolt served as Mallinckrodt’s Director of Internal Controls, Gross to Net Accounting and Government Reporting from November 2015 until July 2017. In that position, he learned that Mallinckrodt had been misreporting the base Average Manufacturer Price (“AMP”) for Acthar to the Medicaid Drug Rebate Program (MDRP), which reduced the rebates Mallinckrodt paid to the MDRP by hundreds of millions of dollars.

Acthar was first approved by the FDA in 1952. In 2001, it cost approximately $50 per 5 ml vial. Since then, Mallinckrodt has increased its price to approximately $40,000 per vial. As a drug approved prior to 1990, Acthar’s base AMP should have been reported using its price in 1990. Starting in 2013, however, Mallinckrodt began reporting data to the MDRP as if Acthar had been approved in 2010 (after the enormous price hikes).

Source: Mallinckrodt Agrees to Pay $234 Million to Settle False Claims Act Case Brought by Whistleblower Law Collaborative Client for Unpaid Acthar Medicaid Rebates / yahoo!finance

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