Mallinckrodt Settles DOJ Lawsuits Over Medicaid Rebates and Medicare Kickbacks for $260M

Mallinckrodt has agreed to two settlements totaling $260 million, putting to rest a 2020 Department of Justice (DOJ) lawsuit filed in a Massachusetts federal court alleging that the company evaded more than $250 million worth of Medicaid rebates for its blockbuster drug H.P. Acthar Gel (repository corticotropin).

The deal also settles DOJ allegations that Mallinckrodt used a charity to pay illegal kickbacks to Medicare patients in exchange for choosing the company’s drug.

The settlements come just one month after a bankruptcy judge in Delaware green-lighted Mallinckrodt’s $1.7 billion settlement resolving several opioid claims and its Chapter 11 exit plan. The company anticipates emerging from Chapter 11 in the first half of 2022.