Mallinckrodt, the drug company that raised the price of its infant seizure treatment Acthar by 100,000%, also used bribery tactics to boost sales of the drug.
In a not too distant future, Mallinckrodt will probably take the place of Enron as the prime example of everything that’s wrong with hyper-capitalism in corporate ethics courses.
Why? Let us first take you back to 2001.
The price hike
Acthar is used to treat infantile spasms, a rare and catastrophic form of epilepsy. In 2001, it was sold for about $40 per vial. Then, a company called Questcor bought the rights to the drug and started to jack up its price. By the time Questcor was sold to Mallinckrodt for $5.6 billion in 2014, the price for Acthar hit $32,000.
The price Questcor originally paid for Acthar? $100,000.
Mallinckrodt, also known as MNK, continued to raise the price since the acquisition. Today, Acthar costs about $40,000 a vial.
What was the reasoning behind the price increase?
There was none. There was no R&D. There was no product improvement.
Instead, Questcor spent their money on buying out a firm that sold a competing drug in Europe and Canada and making sure the drug never entered the US market. Synacthen, Acthar’s main competitor that Questcor bought and blocked in the US, sells for $33 in Canada. Vile motherfuckers.
What about the babies?
In the US, about 2,000 babies are diagnosed with infantile spasms every year, usually before their first birthday. About 70% to 90% of them will have permanent cognitive or developmental disabilities, often with IQs in the range of 30 to 50.
Neurologists say it’s crucial to get spasms under control quickly – however, Acthar’s high price makes it hard for them to prescribe the drug. Dr. Phillip L. Pearl, a professor of neurology at Harvard said, “a lot of us had to ride this roller coaster of whether to use Acthar or to use oral steroids first”.
Danny Marx-Abel, a baby with infantile spasms, had to surgically remove the left hemisphere of his brain after his neurologist recommended oral steroids first due to concerns about Acthar’s high price.
Meanwhile, Don Bailey, the former CEO of Questcor behind the extraordinary price hike, left MNK in 2016. He received more than $25 million upon leaving the company.
According to the report, MNK:
- Violated the federal Anti-Kickback Statute by bribing healthcare providers to promote and prescribe Acthar.
- Systematically promoted Acthar for unapproved, off label uses
- Filed hundreds or thousands of false claims for reimbursement of Acthar to be paid by federal healthcare programs – essentially stealing taxpayers’ money
If found guilty, Mallinckrodt could be forced to pay up to 3 times the amount they defrauded the govt for, as well as penalties ranging from $5,500 to $11,000 for each false claim. We wish justice would strike down upon MNK with great vengeance and furious anger for attempting to destroy our babies, but since we’re in America, they’ll probably get a slap on the wrist.