Company in 85,000% infant epilepsy drug price increase receives $100 million fine

pharmafile | January 23, 2017 | News story | Sales and Marketing Mallinckrodt, Martin Skhreli 

Mallinckrodt Pharmaceuticals has hit the headlines for particularly dispiriting reasons – with further evidence of practise by some companies that plumbs new depths for certain practices in the industry.

Not only did the company raise the price of a drug responsible for treating infant epilepsy by 85,000%, with the price increasing from $40 per vial to $34,0000, but also purchased the rights to a rival drug and then chose not to develop it.

The news actually comes to light through Martin Shkreli, the pharmaceutical industry’s favourite enfant terrible, as his company was the one that filed a lawsuit in 2014 alleging anticompetitive tactics and brought the situation to the Federal Trade Commission’s (FTC) attention.

This case hinged on the fact that Mallinckrodt had acquired a competitor to its own Acthar Gel, the drug Synacthen, and then refused to develop the drug. It essentially locked competitors out of the market and allowed it to increase the price of its own drug stratospherically.

The FTC ruled that Mallinckrodt had behaved in an anticompetitive manner and has ordered Mallinckrodt to pay $100 million and will have to license the alternative drug, Synacthen, to Marathon Pharmaceutical. Mallinckrodt, however, refused to admit any wrong doing and agreed to the fine “without admission of wrongdoing”.

Beyond this, the company released a statement: “We are pleased with the agreement reached to resolve this legacy matter, although we continue to strongly disagree with allegations outlined in the FTC’s complaint, believing that key claims are unsupported and even contradicted by scientific data and market facts, and appear to be inconsistent with the views of the FDA. Removing the distraction of litigation enables us to focus on advancing our increasingly diversified portfolio of medicines for the benefit of patients. The resolution also allows us to retain the rights to continue manufacturing and marketing Synacthen Depot to patients in other countries around the world where we already have rights. And, more importantly, we can continue to develop the product for all other indications in the U.S. except IS and NS, including our recently announced trial to explore its potential use for patients suffering from DMD.”

Ben Hargreaves

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