Irish drugmaker Mallinckrodt and its U.S. subsidiary will pay $100 million to settle allegations it illegally hindered competition for a drug used to treat a rare seizure disorder in infants and then significantly raised the price of its product.
The Federal Trade Commission and the state of New York claim that Mallinckrodt, formerly known as Questcor Pharmaceuticals, violated antitrust law when, in 2013, it bought the rights to develop a competing drug from Novartis.
The FTC said Questcor already had “an existing monopoly” in the U.S. for treatment of the disorder with its drug Acthar. The agency alleges Questcor outbid several other companies to acquire the rights of Novartis' drug, Synacthen Depot. The other companies were interested in developing the drug at a “significant discount” compared with Questcor's price.
Questcor repeatedly raised the price from $40 per vial in 2001 to more than $34,000 per vial currently, the FTC said.
In a statement, a Mallinckrodt spokesperson said, “We are pleased with the agreement reached to resolve this legacy matter, although we continue to strongly disagree with allegations outlined in the FTC's complaint, believing that key claims are unsupported and even contradicted by scientific data and market facts, and appear to be inconsistent with the views of the Food and Drug Administration.”
In addition to its $100 million settlement, Mallinckrodt is also required to license Synacthen Depot to another manufacturer. Mallinckrodt said this will not affect its net sales.
Acthar represented 34% of its net sales in fiscal year 2016, according to its annual report. Mallinckrodt reported $3.38 billion in revenue in 2016.
Several media outlets have reported that the FTC began its probe of Questcor after Martin Shkreli, the notorious CEO of Retrophin who himself was accused of irresponsibly raising drug prices, filed a lawsuit in 2014 alleging Questcor violated antitrust law when it purchased Synacthen Depot. It's unclear what Shkreli's motive was for suing.
Mallinckrodt's settlement with the FTC fuels public outrage over price gouging among pharmaceutical companies, especially those with a monopoly on products.