March 18, 2022. The United States Department of Justice settled a case against Irish-American pharmaceutical manufacturer Mallinckrodt ARD LLC (formerly Questcor Pharmaceuticals, Inc.) for failing to pay the proper Medicaid Drug Rebate Program amounts to the government for its drug H.P. Acthar. Under the terms of the settlement, the drug company will pay a total of $233,707,865 to both the federal government and Medicaid participating states, all of which is considered restitution. The whistleblower who reported this conduct in 2018 was a former Mallinckrodt director of internal controls, gross-to-net accounting, and government reporting. They will be awarded 20% of the government’s recovery, almost $47 million.
Knowingly decreasing an obligation to pay money to the government constitutes a violation of the False Claims Act. According to the allegations, the pharmaceutical manufacturer knowingly underpaid Medicaid rebates for its Acthar drug. Under the Medicaid Drug Rebate Program, pharmaceutical manufacturers enter into an agreement with the government and pay inflation-based rebates to federal and state governments. The rebates constitute the “difference between the drug’s current price and the price the drug would have had if its price had increased at the rate of inflation since 1990, or the date when the drug was first marketed, whichever date is later.” These quarterly rebates are intended to insulate Medicaid beneficiaries from inflation-based drug price increases....
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