Massachusetts Attorney General Intervenes in Case Against Major Drug Company

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The following is a press release from the Massachusetts Attorney General’s office

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BOSTON – Massachusetts Attorney General Maura Healey announced today, July 16, her office has filed a complaint under the Massachusetts False Claims Act against major drug manufacturer Mallinckrodt ARD LLC for allegedly underpaying millions of dollars in rebates to the state’s Medicaid program (MassHealth).

            The AG’s Office alleges that Mallinckrodt ARD LLC, previously known as Questcor Pharmaceuticals (Mallinckrodt), knowingly underpaid rebates to MassHealth through the Medicaid Drug Rebate Program for the medication Acthar Gel (Acthar). Under this program, when drug manufacturers raise drug prices beyond the rate of inflation they must pay quarterly rebates to Medicaid in exchange for Medicaid’s coverage of the manufacturers’ drugs.

            “Nearly two million people across the state rely on MassHealth to get critically important medical care, including prescription drugs like Acthar,” said AG Healey. “It is inexcusable when drug companies like Mallinckrodt try to unlawfully boost their profits and shortchange residents who rely on MassHealth. We are filing this complaint to ensure this alleged behavior stops and to recover millions of dollars owed to our state.”

            According to the multi-state complaint filed today in the U.S. District Court for the District of Massachusetts, which was joined by 27 other states and territories, since 2013, Mallinckrodt allegedly has defrauded Massachusetts by falsely reporting the Base Date “Average Manufacturer Price” (or AMP) for Acthar.

Moreover, Massachusetts alleges that since no later than April 2016, Mallinckrodt has known that it paid these lower rebates in defiance of requests for corrective action by the federal government. As a result of this conduct, the complaint alleges that Mallinckrodt failed to report and return hundreds of millions of dollars in overpayments to state Medicaid agencies nationwide.

Acthar is used to treat a variety of conditions, including multiple sclerosis, psoriatic and rheumatoid arthritis, lupus, breathing disorders, and other inflammatory conditions.

            These allegations were originally made in a case filed in September 2018 under the whistleblower (or qui tam) provision of the False Claims Act. The act permits private parties to sue for fraud on behalf of the government, and it also permits federal and state governments to intervene in such actions, as Massachusetts has done in this case, which is captioned United States of America et al. ex rel. Landolt v. Mallinckrodt ARD LLC, No. 18-11931-PBS (D. Mass.).

Joining Massachusetts in its complaint in intervention are Alaska, California, Colorado, Connecticut, Delaware, Florida, Georgia, Illinois, Indiana, Louisiana, Maryland, Michigan, Nevada, New Jersey, New Mexico, New York, North Carolina, Oklahoma, Rhode Island, Tennessee, Texas, Vermont, Virginia, Washington, Wisconsin, the District of Columbia, and Puerto Rico.

            In the Massachusetts AG’s Office, this matter is being handled by Managing Attorney Ian Marinoff, with assistance from Investigator April Waterhouse, both of the AG’s Medicaid Fraud Division.

The AG’s Medicaid Fraud Division receives 75 percent of its funding from the U.S. Department of Health and Human Services under a grant award. The remaining 25 percent is funded by the Commonwealth of Massachusetts.

editor

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