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Mallinckrodt Whistleblowers Say Illegal Kickbacks Backed High Acthar Prices

Mallinckrodt Whistleblowers Say Illegal Kickbacks Backed High Acthar Prices

As one of the most expensive drugs in the nation, H.P. Acthar Gel (Acthar) pulls in sales topping $1 billion per year for drugmaker Mallinckrodt Pharmaceuticals. Prescribed by doctors to ease symptoms of rheumatoid arthritis, multiple sclerosis, and infant seizures, Acthar currently costs around $39,000 per vial. The average MS patient uses five vials over the three-week dosing period.

Why are doctors prescribing a drug that costs $195,000 per patient when more effective alternatives like prednisone cost just a few hundred dollars?

Researchers with Oregon Health and Sciences University (OHSU) asked that question five years ago, finding that less than 1% of physicians prescribed Acthar in 2013 and 2014. Forty percent of Medicare billings for Acthar for those years were traced to a total of just 274 physicians who prescribed Acthar 11 times or more.

“Because of the tremendous cost, you really should have evidence that it’s superior and beneficial compared to much cheaper forms of generic steroids, like prednisone,” said Dennis Bourdette, M.D., Chair of Neurology at OHSU. “We question why a small number of physicians are prescribing this extremely expensive drug when there are much cheaper alternatives.”

In September 2017, researchers published in the Journal of the American Medical Association that most Acthar sales were "driven in part by a relatively small group of doctors who were prescribing it heavily.”

Many questioned Mallinckrodt’s marketing tactics - including two former employees.

Former Questcor multiple sclerosis sales specialist, Charles Strunck, and former Questcor / Mallinckrodt Acthar neurology specialist, Lisa Pratta, filed a whistleblower lawsuit against Questcor in 2012, alleging that the pharmaceutical company violated the federal False Claims Act (FCA) by illegally bribing physicians to promote and prescribe Acthar.

Physicians must be free to prescribe medications they feel are best suited to each individual patient’s needs. When drug companies offer illegal kickbacks (cash, gifts, paid vacations) to persuade doctors to sell their drug, they bias the doctor’s judgment and put patient health at risk.

Hence, compliance with the federal Anti-Kickback Statute is required to participate in Medicare and Medicaid programs. Any submitted claims involving kickback schemes are considered false claims.

On March 6, 2019, after an extensive investigation into the whistleblowers’ claims, the federal government decided to intervene in the FCA lawsuit. According to court documents, whistleblowers Charles Strunck and Lisa Pratta claim that, since 2007, Questcor / Mallinckrodt “intentionally engaged in an illegal scheme to increase Acthar sales and profits” by:

  • Causing submission of “hundreds to thousands” of false claims to government-funded healthcare programs
  • Instructing staff to hide evidence of Acthar promotional and marketing plans
  • Making false statements to the FDA concerning Acthar’s effectiveness
  • Marketing Acthar for FDA-unapproved, off-label uses
  • Offering doctors illegal kickbacks for promoting and prescribing Acthar
  • Paying sales reps bonuses of up to $80,000 a month to sell Acthar

“Questcor's conduct has had a material effect on the Government Health Care Programs decision to pay for H.P. Acthar Gel,” says the lawsuit. “Had these programs known that reimbursements were being made for H.P. Acthar Gel caused by Questcor's unlawful promotion, it would not have made such reimbursements.”

Since the Department of Justice has decided to intervene, Strunck and Pratta are eligible to receive a cash whistleblower award of between 25% and 30% of the total government recovery from settlement or verdict.

Mallinckrodt, which acquired Questcor for $5.6 billion in 2014, doesn’t deny the allegations but says its subsidiary is primarily to blame. The Justice Department has until June 4, 2019 to file its claim.

If you suspect your pharmaceutical employer or other company is participating in similar illegal drug marketing tactics or other pharmaceutical fraud, contact us confidentially by emailing us at: [hidden email] or call us at 202.780.9957.

We connect potential whistleblowers with the necessary experts and qualified lawyers required to maximize cash awards and protection from retaliation.  There is no fee for our services. The Pharmaceutical Integrity Coalition (PIC) is an independent Advocacy Group, with no ties to the Pharma industry.

Related topics: Acthar

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