Pharmaceutical lawsuit results in nearly $14.5M for Michigan

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Published: Jun. 22, 2022 at 5:11 PM EDT
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LANSING, Mich. (WNEM) - A settlement valued at over $233 million against Mallinckrodt ARD, LLC means Michigan will begin receiving payments this July.

The settlement resolves allegations against the subsidiary of Irish pharmaceutical company Mallinckrodt plc, of knowingly underpaying Medicaid rebates for it’s drug H.P. Acthar Gel. It is alleged that the companies violated the Federal False Claims Act and the Michigan Medicaid False Claims Statute, resulting in the submission of false claims to the Michigan Medicaid program.

According to Attorney General Dana Nessel, under the Medicaid Drug Rebate Program, when a manufacturer increases the price of a drug faster than the rate of inflation, it must pay the Medicaid program a per-unit rebate of the difference between the drug’s current price and the price of the drug if its price had gone up at the general rate of inflation since 1990 or the year the drug first came to market, whichever is later.

Mallinckrodt and its predecessor Questcor began paying rebates for Acthar in 2013, as if it was just approved by the FDA, rather than being a drugged introduced to the market in 1952.

“We will not stand for pharmaceutical companies gaming the system to pad bottom lines,” Nessel said. “I’m proud of the work done by our team that advocated for Michigan and successfully secured more than $14 million in state settlement dollars.”

The total value of the settlement is $233,707,865.18, plus interest, to be paid over seven years. The state will receive $14,450,193.22.