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Drugmaker Mallinckrodt Defrauded Medicare Out of Hundreds of Millions of Dollars, According to Whistleblower Suit

The government has decided to intervene in a whistleblower lawsuit against Questcor Pharmaceuticals, the maker of H.P. Acthar. According to the allegations, the company used an elaborate scheme to boost sales revenue from the drug, defrauding taxpayers out of hundreds of millions of dollars.  

Drugmaker Mallinckrodt Defrauded Medicare Out of Hundreds of Millions of Dollars, According to Whistleblower Suit

The alleged wrongdoing involved artificially inflating the price of the drug and offering kickbacks to physicians and other healthcare professionals to increase the number of Acthar prescriptions.  

Questcor is now Mallinckrodt, following a multi-billion-dollar M&A deal dating back to 2014. The alleged misconduct started before the deal and extended beyond 2017. Over a period of 19 years, the price of Acthar went from a mere $40 to a shocking $39,000; a 97,000 percent increase.

Medicare and Medicaid fraud cost U.S. taxpayers billions of dollars every year. The government relies on whistleblower tips to expose this type of misconduct. In the case of Questcor, the tipsters were two of the company’s former employees, who were involved in Acthar-related operations.

According to the complaint, Questcor/Mallinckrodt representatives paid kickbacks to doctors, lied to the FDA, promoted off-label uses, and induced prescriptions of medically unnecessary doses.

Through these strategies, annual sales of Acthar skyrocketed, eventually reaching $1 billion. Medicare paid a shocking $2 billion in the shape of Acthar reimbursements over six years.

The whistleblowers claim Mallinckrodt and its predecessor subjected patients “to unapproved, unsafe, and potentially ineffective uses of H.P. Acthar Gel,” and attempted to cover-up “its payment of kickbacks and its illegal promotion of H.P. Acthar Gel by making false statements to the FDA and directing employees to conceal evidence by failing to disclose . . . the full nature and extent of its advertising, promotional and marketing materials and plan."

If Mallinckrodt settles the case, it could end up paying hundreds of millions of dollars. An outcome of that nature would result in the whistleblowers receiving multi-million-dollar rewards for their role in uncovering the fraud.

A spokesperson for the defendant did not deny that the misconduct existed, but attributed it to Questcor, referring to it as “legacy” conduct inherited from the company’s former administration.

Following the announcement of the DOJ’s intervention in the lawsuit, the price of Mallinckrodt shares experienced a significant drop, a testimony to its shareholders’ anticipation of a potential settlement.

If you know of a healthcare provider or company that is cheating its patients, call us. We can assist you in putting an end to the fraud and help you receive a large cash reward for your trouble. Connect with us 888.742.7248 or ONLINE.

Medicaid Fraud Hotline: 888.742.7248 or Report Online
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