Tennessee will receive approximately $5 million from a settlement with pharmaceutical company Mallinckrodt, according to a release from Attorney General Herbert Slatery.
In total, the company will be required to pay more than $233 million over the next seven years to all 50 states, Puerto Rico, Washington D.C., and the federal government.
According to officials, the company purposefully underpaid Medicaid rebates for one of its drugs for roughly seven years. Therefore, the group allegedly violated portions of the Federal False Claims Act and Tennessee’s False Claims Act.
“Mallinckrodt significantly increased the price of this particular drug, then tried to ignore that fact when calculating and paying Medicaid rebates to programs like TennCare,” said General Slatery. “Let’s just say – we brought it to their attention.”
Laws mandate manufacturers to pay back the cost of the rise in their medication and inflation.
“However, the government alleges that Mallinckrodt and its predecessor, Questcor, began paying rebates for Acthar in 2013 as if Acthar was a “new drug” just approved by the U.S. Food and Drug Administration (FDA), rather than a drug that was first introduced in 1952. Allegedly, this practice meant the companies ignored all pre-2013 price increases when calculating and paying Medicaid rebates for Acthar from 2013 until 2020. In particular, the government alleges that Acthar’s price had already risen to over $28,000 per vial by 2013; therefore, ignoring all pre-2013 price increases for Medicaid rebate purposes significantly lowered Medicaid rebate payments for Acthar,” the release from the attorney general’s office explained.
The case, which was approved by the U.S. Bankruptcy Court for the District of Delaware, originally stemmed from a lawsuit from a whistleblower.
Earlier this year, the state finalized an agreement with opioid manufacturers that will send an additional $600 million over the next 18 years.
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Cooper Moran is a reporter for The Tennessee Star and The Star News Network. Email tips to [email protected].
Photo “Herbert Slatery” by Tennessee Attorney General.
