Nashville-Attorney General Herbert H. Slatery III announced that Tennessee will receive nearly $5 million dollars in a settlement with Mallinckrodt, which sells and markets pharmaceutical products throughout the nation.
The total value of the settlement is approximately $233 million, plus interest, to be paid over a period of seven years. The agreement settles allegations of fraud against Mallinckrodt with all 50 states, Washington, D.C., Puerto Rico, and the federal government.
The government alleged that from January 1, 2013, through June 30, 2020, Mallinckrodt knowingly underpaid Medicaid rebates due for its drug H.P. Acthar Gel (Acthar). That conduct violated the Federal False Claims Act and Tennessee’s False Claims Act and resulted in the submission of false claims to TennCare, Tennesssee’s Medicaid program.
“Mallinckrodt significantly increased the price of this particular drug, then tried to ignore that fact when calculating and paying Medicaid rebates to programs like TennCare,” said General Slatery. “Let’s just say- we brought it to their attention.”
Under the Medicaid Drug Rebate Program, drug manufacturers are required to pay back the difference between a drug’s price increase each year and the rate of inflation.
However, the government alleges that Mallinckrodt and its predecessor, Questcor, began paying rebates for Acthar in 2013 as if Acthar was a “new drug” just approved by the U.S. Food and Drug Administration (FDA), rather than a drug that was first...
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