STAINES-UPON-THAMES, United
Kingdom, March 16, 2020
/PRNewswire/ -- Mallinckrodt plc (NYSE: MNK), a global
biopharmaceutical company, today confirmed that its subsidiary,
Mallinckrodt ARD LLC, received a decision from the U.S. District
Court for the District of Columbia
in its suit against HHS and CMS (or the Agency) regarding the
company's calculation of Medicaid drug rebates for
Acthar® Gel (repository corticotropin injection). The
District Court upheld CMS' decision to reverse its previous
determination of the base date average manufacturer price (AMP)
used to calculate Acthar Gel rebates.
"This is clearly a disappointing ruling by the District Court.
We continue to believe that a bedrock principle of administrative
law is that the government is required to give fair notice and a
clear, legal basis for a change in position, particularly when that
position has been relied upon by a regulated entity like
Mallinckrodt," said Mark Casey, Executive Vice President and Chief
Legal Officer of Mallinckrodt.
"Because we believe the decision's legal reasoning is significantly
flawed in several respects, we will move for a stay and
reconsideration of the decision with the District Court and, if
necessary, appeal to the United
States Court of Appeals for the D.C. Circuit. Mallinckrodt remains committed to ensuring Medicaid
patients have access to Acthar Gel therapy long term."
In the absence of court intervention and based on the effective
date of the ruling and change to the base date AMP, the company
will pay roughly $650 million for the period from January 1, 2013 to present, and this will be
reflected as a non-GAAP adjustment in the first quarter results.
Based on current Medicaid patient volume, Mallinckrodt estimates the annualized prospective
change to the Medicaid rebate calculation will reduce Acthar Gel
net sales by roughly $90 million to
$100 million.
Certain legal contingencies, including the CMS matter, were
contemplated in reaching the agreement in principle for a global
opioid settlement. The company is engaged in constructive dialogue
with the plaintiff parties to address the impact of the District
Court's decision.
Mark Casey continued, "A number
of contingencies were identified as part of the proposed global
opioid settlement. We will continue to work collaboratively with
the various parties to the agreement in principle to appropriately
consider the District Court ruling and what impact this ruling will
have on the terms of the settlement. We remain committed to working
with these parties to achieve a satisfactory outcome."
As previously announced on Feb.
25, Mallinckrodt continues to
work toward executing its refinancing and exchange transactions to
address near term maturities coming due in April 2020 and August
2022, which are key elements of, and conditions to, a global
opioid settlement.
ABOUT MALLINCKRODT
Mallinckrodt ARD LLC is a
subsidiary of Mallinckrodt, a global
business consisting of multiple wholly owned subsidiaries that
develop, manufacture, market and distribute specialty
pharmaceutical products and therapies. The company's Specialty
Brands reportable segment's areas of focus include autoimmune and
rare diseases in specialty areas like neurology, rheumatology,
nephrology, pulmonology and ophthalmology; immunotherapy and
neonatal respiratory critical care therapies; analgesics and
gastrointestinal products. Its Specialty Generics reportable
segment includes specialty generic drugs and active pharmaceutical
ingredients.
Mallinckrodt Pharmaceuticals uses its website as a channel of
distribution of important company information, such as press
releases, investor presentations and other financial information.
It also uses its website to expedite public access to time-critical
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and Exchange Commission disclosing the same information. Therefore,
investors should look to the Investor Relations page of the website
for important and time-critical information. Visitors to the
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notifications alerting them when new information is made available
on the Investor Relations page of the website.
CAUTIONARY STATEMENTS RELATED TO FORWARD-LOOKING
STATEMENTS
Statements in this document that are not strictly
historical, including statements concerning the dispute between
Mallinckrodt, HHS and CMS with regard
to Medicaid drug rebates for Acthar Gel; the litigation filed by
Mallinckrodt against HHS and CMS in
connection with this dispute and any plans to appeal the recent
decision from the District Court in such litigation; the impact of
this dispute and any related litigation on Mallinckrodt's future financial condition,
operating results, ability to fund future investments in Acthar
Gel, and patients' ability to access Acthar Gel; the impact of this
dispute and any related litigation on the agreement in principle
for a global opioid settlement and related debt financing
activities; and any other statements regarding events or
developments that Mallinckrodt believes
or anticipates will or may occur in the future, may be
"forward-looking" statements within the meaning of the Private
Securities Litigation Reform Act of 1995, and involve a number of
risks and uncertainties.
There are a number of important factors that could cause actual
events to differ materially from those suggested or indicated by
such forward-looking statements and you should not place undue
reliance on any such forward-looking statements. These factors
include risks and uncertainties related to, among other things:
governmental investigations and inquiries, regulatory actions and
lawsuits brought against Mallinckrodt
by government agencies and private parties with respect to its
historical commercialization of opioids, including the non-binding
agreement in principle regarding terms and conditions of a global
settlement to resolve all current and future opioid-related claims;
scrutiny from governments, legislative bodies and enforcement
agencies related to sales, marketing and pricing practices; pricing
pressure on certain of Mallinckrodt's
products due to legal changes or changes in insurers' reimbursement
practices resulting from recent increased public scrutiny of
healthcare and pharmaceutical costs; the reimbursement practices of
governmental health administration authorities, private health
coverage insurers and other third-party payers; complex reporting
and payment obligations under the Medicare and Medicaid rebate
programs and other governmental purchasing and rebate programs,
including as they relate to the pending dispute with HHS and CMS;
cost containment efforts of customers, purchasing groups,
third-party payers and governmental organizations; changes in or
failure to comply with relevant laws and regulations; Mallinckrodt's and its partners' ability to
successfully develop or commercialize new products or expand
commercial opportunities; Mallinckrodt's ability to navigate price
fluctuations; competition; Mallinckrodt's and its partners' ability to protect
intellectual property rights; limited clinical trial data for
Acthar Gel; clinical studies and related regulatory processes;
product liability losses and other litigation liability; material
health, safety and environmental liabilities; potential
indemnification liabilities to Covidien pursuant to the separation
and distribution agreement; business development activities;
retention of key personnel; the effectiveness of information
technology infrastructure including cybersecurity and data leakage
risks; customer concentration; Mallinckrodt's reliance on certain individual
products that are material to its financial performance;
Mallinckrodt's ability to receive
procurement and production quotas granted by the U.S. Drug
Enforcement Administration; complex manufacturing processes;
conducting business internationally; Mallinckrodt's ability to achieve expected benefits
from restructuring activities; Mallinckrodt's significant levels of intangible
assets and related impairment testing; labor and employment laws
and regulations; natural disasters or other catastrophic events;
Mallinckrodt's substantial indebtedness
and its ability to generate sufficient cash to reduce its
indebtedness; the proposed refinancing of certain near-term debt
maturities; future changes to U.S. and foreign tax laws or
the impact of disputes with governmental tax authorities; and the
impact of Irish laws.
These and other factors are identified and described in more
detail in the "Risk Factors" section of Mallinckrodt's Annual Report on Form 10-K for the
fiscal year ended December 27, 2019.
The forward-looking statements made herein speak only as of the
date hereof and Mallinckrodt does not
assume any obligation to update or revise any forward-looking
statement, whether as a result of new information, future events
and developments or otherwise, except as required by law.
CONTACTS
Investor Relations
Daniel J. Speciale, CPA
Vice President, Investor Relations and IRO
314-654-3638
daniel.speciale@mnk.com
Media
Jim Heins
H+K Strategies
212-885-0463
jim.heins@hkstrategies.com
Mallinckrodt, the "M" brand mark and
the Mallinckrodt Pharmaceuticals logo are trademarks of a
Mallinckrodt company. Other brands are
trademarks of a Mallinckrodt company or
their respective owners. © 2020 Mallinckrodt. 3/20
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SOURCE Mallinckrodt plc