An Irish drug maker was accused of slowly hiking the price
of a life-saving medication used to treat infants from $40 a vial to more than
$34,000 a vial, and preventing other pharmaceutical firms from creating a
competitive drug.
The company, Mallinckrodt, agreed Wednesday to settle
charges of anti-competitive practices by paying a $100 million fine and allow a
competitor to produce a similar medication.
The Federal Trade Commission announced that the deal was
reached with the FTC and three state attorney generals.
The drug, H.P. Acthar Gel, is used to treat infantile spasms
and multiple sclerosis. A spokesperson for New York Attorney General Eric
Schneiderman -- who was involved in the settlement -- said the drug is
typically prescribed in "life-saving situations."
Schneiderman's office said Mallinckrodt's (MNK)U.S.
subsidiary -- formerly known as Questcor -- purchased Acthar in 2001 and
proceeded to slowly raise the price of the drug 85,000%. The complaint says a
single course of treatment can cost "well over $100,000."
The complaint also alleges that Questcor thwarted attempts
by its competitors to introduce a similar drug to the U.S. market by
out-bidding their efforts to acquire Synacthem, which is used to treat the same
conditions, in 2013.
Now, the company must give up its rights to Synacthem and
allow another company to produce the product.
"This is an egregious case of a monopolist doing a deal
to eliminate potential competition and keep its power over pricing,"
Schneiderman said in a statement. "This settlement will restore the
competition that was prevented by Questcor's illegal actions."
Mallinckrodt shares plummeted nearly 14% during trading
hours Wednesday before ending the day down 6% from the open.
In a statement issued Wednesday, Mallinckrodt said, "We
are pleased to confirm that we have entered into a settlement agreement with
the FTC staff to fully resolve this matter, subject to approval by the
commission. We will comment further at the appropriate time."
President-elect Trump recently said drug companies were
"getting away with murder" in their pricing.
The issue also attracted attention during the presidential
campaign last year when Democratic candidates Hillary Clinton and Senator
Bernie Sanders lambasted pharma CEO Martin Shkreli for vaulting the price of an
HIV treatment drug by 5,000%.
EpiPen-maker Mylan was also acccused of price gouging last
August when it hiked the price of the life-saving allergy treatment by 400%
since 2009.
http://money.cnn.com/2017/01/18/news/drug-pricing-mallinckrodt-ftc-fine/index.html
Courtesy of a colleague
Courtesy of a colleague
Martin Shkreli . . . whistleblower?
ReplyDeleteThe Federal Trade Commission, following an exclusive report by The Post, has settled charges against UK-based drug maker Mallinckrodt for allegedly creating a monopoly to jack up the price of a drug used to treat infant spasms by 85,000 percent since 2001, to $34,000 a vial.
The twist: the FTC had launched its investigation into Mallinckrodt shortly after “pharma bro” Shkreli, then the chief executive of drugmaker Retrophin, filed suit in 2014 alleging anticompetitive tactics by Questcor, a drug company that Mallinckrodt now owns.
Specifically, Shkreli had accused Questcor of acquiring the competing drug Synacthen from Novartis — and then shutting it down so it could continue to charge sky-high prices for its own drug.
Following The Post’s report that regulators were prepping charges, the FTC said Wednesday Mallinckrodt will pay $100 million to settle the charges, and will be forced to grant a license to a rival firm to make the competing drug, Synacthen, within 120 days.
“We charge that, to maintain its monopoly pricing, [Questcor] acquired the rights to its greatest competitive threat, a synthetic version of Acthar, to forestall future competition,” FTC Chairwoman Edith Ramirez said. “This is precisely the kind of conduct the antitrust laws prohibit.”
Mallinckrodt, which hasn’t admitted wrongdoing, confirmed the settlement in a Wednesday statement.
A source close to Mallinckrodt added, meanwhile, that Shkreli filed his suit against Questcor after he tried and failed to buy Synacthen.
Indeed, the irony in the case is thick.
Shkreli, as the CEO of Turing Pharmaceuticals in 2015, drew national derision when he acquired the rights to Daraprim, a 50-year old-plus drug used to treat parasitic infections, and promptly increased the price to $750 from $13.50...
“Think you know everything about me? I was a whistleblower against high drug prices, too,” Shkreli posted on his Facebook page Wednesday, attaching The Post’s article. “Details, context, subtlety. Try it sometime.”
http://nypost.com/2017/01/18/complaint-from-martin-shkreli-leads-to-ftc-drug-price-suit/
It didn't take long for the first specialty pharma scandal of 2017 to materialize.Mallinckrodt PLC on Wednesday disclosed it will pay $100 million to settle FTC charges that Questcor Pharmaceuticals, which Mallinckrodt bought in 2014, illegally raised the price of its best-selling drug Acthar by 85,000 percent and bought the rights to a cheaper competing drug to keep it out of the U.S. market. The settlement forced Mallinckrodt to give a free limited U.S. license for that cheaper drug to a competitor, Marathon Pharmaceuticals.
ReplyDeleteWhile the settlement's optics aren't stellar, its actual impact is harder to gauge. The fine is basically meaningless, amounting to about a third of Acthar's quarterly sales. Licensing the cheaper drug, Synacthen, won't have any effects for a while. Marathon will have to run trials on it. And in a conference call Thursday morning, Mallinckrodt said it expects getting Synacthen to market in the U.S. to challenge Acthar will be "exceptionally difficult, if not impossible."That claim seems a little rich, as Questcor considered Synacthen threatening enough to outbid at least three other companies for it in 2013. And even if it isn't game-changing, the settlement highlights the risk of Mallinckrodt's dependence on Acthar. Acthar accounted for 37 percent of Mallinckrodt's revenue in its most recently reported quarter. Many of the company's specialty peers rely far less on one drug. Its second-largest product, Inomax, accounted for 14.3 percent of revenue...
The settlement is not the only troubling thing about Acthar. The FDA green-lit the drug in the 1950s, and it's approved for 19 different uses. But there is limited evidence of its effectiveness in treating most of those conditions, beyond infantile and multiple sclerosis spasms, because it was approved before detailed testing was the norm. In 2015 the drug failed a trial in lupus, one of those grandfathered indications. That doesn't exactly bode well for Mallinckrodt's efforts to expand its use.Those concerns, the drug's age, and its price make it vulnerable to competition in general, even if Mallinckrodt is right that Synacthen is not a threat. If the company is wrong, then the downside risk is even greater.
https://www.bloomberg.com/gadfly/articles/2017-01-19/mallinckrodt-s-acthar-worries-aren-t-over