Mallinckrodt to Pay $100 Million to Settle Antitrust Allegations on Unlawful Drug Monopoly
January 18 2017 - 4:54PM
Dow Jones News
By Brent Kendall and Peter Loftus
Irish drugmaker Mallinckrodt PLC and a U.S. subsidiary will pay
$100 million and agree to other conditions to settle government
antitrust allegations they unlawfully prevented competition for
Acthar, a drug that has seen enormous price spikes in recent
years.
The Federal Trade Commission and attorneys general from New York
and four other states alleged the U.S. subsidiary, formerly known
as Questcor Pharmaceuticals, violated antitrust laws when it
acquired the rights to a competing drug, Synacthen, that threatened
its monopoly in the U.S.
The Food and Drug Administration originally approved Acthar, an
injected drug, in 1952, and it eventually became used as a
treatment for many conditions including multiple sclerosis.
Questcor acquired the drug from a predecessor company of Sanofi
SA in 2001, and in 2007 Questcor began to implement sharp price
increases for it, jumping to $23,269 per vial from $1,650, and it
has continued to rise since then, according to Securities and
Exchange Commission filings.
In 2010, the FDA approved Acthar's use to treat a rare seizure
disorder in infants, which conferred market exclusivity that barred
copycat versions for that use for a seven-year period.
Mallinckrodt acquired Questcor for $5.9 billion in 2014.
Synacthen is used in Europe and Canada to treat patients with
the same conditions, but at a fraction of the practice, antitrust
enforcers said. They said Questcor acquired the U.S. rights to
Synacthen from Novartis AG in 2013, outbidding several other
companies that might have made the drug available in the U.S. to
compete with Acthar.
In addition to the $100 million payment, the settlement requires
Mallinckrodt to license the rights to Synacthen to another firm
that could then commercialize the drug in the U.S.
Federal and state officials said the agreement would allow for
the competition that Questcor sought to prevent.
New York Attorney General Eric Schneiderman said the matter was
"an egregious case of a monopolist doing a deal to eliminate
potential competition."
Mallinckrodt confirmed it had reached a settlement and said it
would comment further "at the appropriate time."
The outcry over the big price increases for Acthar was a
harbinger of the more recent backlash against rising prices for
many other drugs, such Mylan NV's EpiPen emergency-allergy
treatment and Turing Pharmaceuticals' anti-infective Daraprim.
Write to Brent Kendall at brent.kendall@wsj.com and Peter Loftus
at peter.loftus@wsj.com
(END) Dow Jones Newswires
January 18, 2017 16:39 ET (21:39 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
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