Two whistleblowers at a drugmaker that recently made news for a major price hike alleged the company bribed doctors to increase sales, according to CNN, citing court documents unveiled this week.
The whistleblowers accused Questcor Pharmaceuticals, now Mallinckrodt, of using a “multi-tiered strategy” to boost sales of the drug H.P. Acthar Gel, used to treat a rare infant seizure disorder. The drug’s price has spiked nearly 97,000 percent in the past two decades, from $40 per vial in 2000 to almost $39,000, according to CNN. Much of the increase occurred before Mallinckrodt acquired the company in 2014, though the price hikes have continued in the last five years.
When Mallinckrodt took over Questcor, the cost of the drug was $32,000. The company told The Hill that it has made only “modest price adjustments in the mid-single digit percentage range” since the acquisition.
{mosads}The Justice Department recently intervened in the case, which has been under seal in the Eastern District of Pennsylvania for the past seven years and was amended to reflect Mallinckrodt’s 2014 purchase of the company. It claims that the company took part in a bribery scheme to induce healthcare providers to write more prescriptions and to promote and market Acthar Gel for FDA-unapproved, or “off-label,” uses.
The scheme, the whistleblower suit claims, led to numerous false reimbursement claims for the drug submitted to federal health care programs.
Mallinckrodt said in a press release that the original lawsuit was filed in 2012, before it took ownership of Acthar Gel, and wrote that it “strongly disagrees” with the “sensational characterization of the allegations.”
“The U.S. Department of Justice (DOJ) elected to join an existing civil False Claims Act case against the company, which has been unsealed by a court in the Eastern District of Pennsylvania,” Mallinckrodt said in the statement. “The original action was filed in 2012, prior to Mallinckrodt’s ownership of Acthar Gel, and consists of two complaints filed by former Questcor employees. Questcor was the previous owner of Acthar Gel. The allegations pertain principally to legacy Questcor conduct.”
Despite Mallinckrodt’s statement, the lawsuit specifies that certain practices, such as a daily report tracking sales representatives’ productivity to promote a “sell at cost” mentality, continued after the acquisition, according to CNN.
–Updated April 30 at 5:50 p.m.