Efforts, whistleblowers in court proceedings against the company, were part of the deliberate "multi-level strategy" of Questcor Pharmaceuticals, now Mallinckrodt, to promote the sale of H.P. Acthar Gel, cheating the government from millions of dollars.
The Ministry of Justice has now intervened in the case after conducting its own extensive investigation – a sign that the government believes the allegations imposed by the whistleblowers are credible. In a statement to CNN, Mallinckrodt did not contest the allegations, but said the error lies primarily on Questcor.
The charges of bomb attacks revealed what the whistleblowers said, a culture to sell the drug at all costs, from lying to the Food and Drug Administration to providing bribes to doctors.
The rise in prices combined with the aggressive selling pressure in rheumatoid arthritis, multiple sclerosis and other areas has caused annual drug sales to exceed $ 1 billion.
In their lawsuits, whistleblowers stated that the pharmacist's behavior "cheated the federal government out of millions of dollars that should not be paid, thereby enriching [the company] and subjecting patients to unapproved, hazardous, and potentially ineffective use of H.P. Acthar Gel. "
"Questcor tried to hide and cover his commissions and his illegal promotion of HP Acthar Gel by making false statements to the FDA and instructing employees to conceal evidence by not disclosing … the full nature and extent of their advertising, promotional and marketing materials and plan. "
Mallinckrodt bought Questcor in 2014 as part of a $ 5.6 billion deal. "The illegal practices that Questcor has been involved in since 2007," said the suit, "knowingly continued from the merger and acquisition of Questcor by Mallinckrodt."
The whistleblower allegations were canceled after the Ministry of Justice filed a notice of infringement on 6 March. The Ministry of Justice has 90 days to file its own complaint, according to the March submission.
If it were found liable, Mallinckrodt could be asked to pay up to three times any amount found to be deceived, as well as sanctions ranging from $ 5,500 to $ 11,000 for each false claim under the whistleblower status.
The Ministry of Justice refused to comment on this story.
In his statement to CNN, Mallinckrodt said he was disappointed with the decision of the Ministry of Justice to continue the case and that he cooperated with the agency. The pharmacist also tried to distance himself from the previous owner of Acthar, Questcor.
"The accusations mainly relate to Questcor's heritage," Mallinckrodt said.
"Mallinckrodt has fully cooperated with DOJ in reviewing this historical behavior, voluntarily providing documents and information to the government. Although we are disappointed, DOJ has decided to continue the court proceedings, we are in advanced talks with the government over the last few months.
"The company is convinced that these sales and marketing claims are likely to be resolved in the near future through ongoing negotiations, and further believes that a solution that is sensible and manageable to all parties is achievable. accusations of earlier negotiations before Mallinckrodt's acquisition of Acthar Gel, we assume no impact on how Mallinckrodt is doing today. "
In its statement, the company informed the whistleblower about two former Questcor employees. However, the suit clearly shows that one of the employees remained after the merger in 2014 and worked for Mallinckrodt and left the company in June 2017.
After CNN published this story, Mallinckrodt sent another statement: "Mallinckrodt strongly disagrees with the nature of the complaint and the sensational characterization of the charges."
Marc Orlow, a lawyer representing two whistleblowers, welcomed the government's decision.
"Our clients are real heroes who face a corrupt corporate culture that cost taxpayers hundreds of millions of dollars," he said.
Expert: "Bad sign" for the company
The government does not take the decision to intervene in the whistleblower lightly, said Jennifer Arlen, a law professor at New York University that specializes in corporate law enforcement.
Health commission commissions, Arlen said, can be "very challenging because pharmaceutical companies regularly have legitimate consulting and research measures with doctors."
"The government must show that the intention was to reward doctors for their prescribing behavior," she said.
What will be interesting, Arlen said, is if the government uses its vast amount of prescribed medical data to support its case.
"In the current administration, there seems to be an effort to combat various forms of health scams, and I know that DOJ uses data analysis to identify doctors who cheat the government," she said. "Data could be used very effectively in this case."
CNN's investigation last year found that Actharu manufacturers paid millions of doctors.
More than 80% of Medicare doctors in 2016 claim that Acthar received money or other benefits from drug manufacturers according to CNN's analysis of publicly identified prescribers.
The analysis, which focused on doctors who submitted more than 10 claims in Part D, found that Mallinckrodt and Questcor paid 288 subscribers over $ 6.5 million for consulting, promotional and other program-related services between 2013 and 2016 Acthar.
$ 1,000 for gas
The whistleblower trial was under seal for seven years at the US District Court in the Eastern District of Pennsylvania because it was originally filed against Questcor in 2012. The suit was altered to reflect Mallinckrodt's purchase of Questcor in 2014.
When the government's filing notification intervenes in the case of the notifier, the complaint will be pending – in this case the fourth amended complaint filed on June 8, 2017. All other documents relating to the case remain sealed.
This is not the first time Mallinckrodt has faced government control over Acthar. The pharmaceutical company reached $ 100 million in 2017 after the Federal Trade Commission accused the drug manufacturer of antitrust infringements to thwart competitors from underestimating Acthar's exorbitant price. The company has settled without admitting the infringement.
The drug is approved for 19 indications, including multiple sclerosis, rheumatoid arthritis and kidney disease. However, critics note that the drug has been approved for many of these conditions long before stricter FDA standards today and that there are few randomized clinical trials that show its effectiveness, especially in adult conditions.
"Medicare has spent billions of dollars on Acthar for questionable indications," said Dr. Dennis Bourdette, chairman of the Department of Neurology at Oregon University in Health and Science, who studied the cost of medicine and prescribed it for years.
The whistleblower suit was filed by Charles Strunck, who worked for Questcor as a specialist in multiple sclerosis from September 2010 to August 2011, and Lisa Pratta, who was a specialist in Acthar's Neuro-Questcor and then from September 2010 to June 2017 by Mallinckrodt.
According to this action, Mallinckrodt "deliberately engaged in an illegal regime to increase its sales and profits by engaging" in a number of illegal activities, including:
- Violation of the Federal Return Law "by" using valuable incentives, rewards, and other forms of reward to encourage the healthcare provider to promote and prescribe "Actharu."
- "Systematically promote and market H.P. Acthar Gel for unapproved, off label use."
- "Causing hundreds or thousands of false claims to reimburse H.P. Acthar Gel to be presented and paid by federal health care programs."
Sales representatives were rewarded royally for increased sales, said the suit, with lucrative monthly bonuses designed to support "sell at any cost" mentality. One sales specialist received a $ 124,000 bonus in the second quarter of 2011, of which $ 75,000 in a single month; another has received a $ 110,000 bonus in the same quarter, including $ 80,000 in one month, an alleged claim.
Sales representatives were given a daily report "tracking productivity of all specialists to motivate them."
"This practice continued after the merger with Mallinckrodt," the suit said.
Suit claims Questcor had difficulty entering the multiple sclerosis market because there was a cheaper alternative that was considered the standard of care for MS flareups.
"Questcor's answer to this challenge was to bribe the doctor to prescribe and support H.P. Acthar Gel," the suit said.
The suit went on to say that many doctors treating MS patients refused to talk to Questcor's sales representatives, but the company invented the work: "One way Questcor has overcome this threshold of obstacles is to bribe office workers to hold such meetings. "
Bourdette, executive director of the Center for Multiple Sclerosis Treatment at Oregon Health & Science University, found these allegations to be particularly interesting.
"In the area of multiple sclerosis, there is a very small number of doctors who prescribe Acthar, and I have never understood why these doctors are doing this," he said. "If these allegations are true, it can provide an explanation."
The cost of the drug has been a source of controversy for over a decade, as the August 2007 price rose from $ 1,600 to $ 23,000. At that time, the drug was primarily sold for infantile seizures, debilitating seizure disorder in children.
Despite protests from high-level epileptic foundations and neurological groups over the high cost of the drug, the price of Acthar climbed another $ 16,000 per bottle. Today, $ 39,000 is in the bottle.
The price increase ranks him among the most dramatic increases in drug prices in the country's history, said Stephen Schondelmeyer, director of the PRIME Institute, a research organization that studies economic and political issues about drugs.
"If gas." [prices] increased from 1993 to 2019 by H.P. Acthar, gas would cost $ 1,300 a gallon today, "he said.