A company responsible for one of the biggest pharma price hikes in U.S. history is being targeted by a lawsuit alleging the company paid kickbacks to doctors who prescribed the drug to boost sales.
According to documents from the federal court case, Questcor Pharmaceuticals, now Mallinckrodt, created a “multi-tiered strategy” to increase sales for H.P Acthar Gel, which is used to treat infantile spasms and multiple sclerosis. The lawsuit is being driven by testimony from two whistleblowers from Questcor.
Questcor first got heat in 2007 for raising the price of a vial of H.P. Acthar Gel from about $2,000 to $23,000 (today, the drug costs about $39,000 per vial).
Then, in addition to the price hike, the lawsuit alleges that Questcor directed employees to hide its kickback scheme, failed to disclose its marketing plan to federal regulators, promoted off-label uses of H.P Acthar Gel and made false Medicare claims. Meanwhile, Medicare reimbursements for H.P. Acthar Gel rose ten-fold over a six year period to about $2 billion total.
The Justice Department has now launched its own investigation into whether or not the company defrauded the government. If found guilty, the company could face penalties as high as $11,000 for each false claim.
Read the full CNN report.