DOJ Files One Fraud Suit Against Mallinckrodt, Settles Another

Federal officials have filed to intervene in a whistleblower suit alleging that English drugmaker Mallinckrodt used a copay charity as a front for illegal kickbacks.

The filing, unsealed in U.S. District Court for the Easter District of Pennsylvania, came on the same day that Mallinckrodt officials announced they had settled a separate False Claims Act suit alleging shady sales practices of a company Mallinckrodt took over.

The latest suit alleges that Mallinckrodt and Questcor—a company that Mallinckrodt acquired in 2014—used a charitable foundation to support “free” prescriptions for its HP Acthar gel, covering patients’ copays while allowing the companies to hike Acthar’s prices.

When Mallinckrodt first started selling Acthar in 2001, it cost about $50; by the end of 2014, it cost more than $32,000, the government says.