Mallinckrodt rejects Racketeering Charges
Drugmaker Mallinckrodt Accused of Racketeering Charges
August 28, 2017
Drugmaker Mallinckrodt and a unit of Express Scripts have urged a federal judge in Illinois to toss an antitrust suit brought by the city of Rockford that alleges that the companies have engaged in a racketeering conspiracy to jack up the price of a hormone drug on which Mallinckrodt currently has a monopoly.
The defendants argue that Rockford does not have the authority to bring such a suit, as it is not a direct purchaser of the drug in question, the adrenocorticotropic medication Acthar.
Mallinckrodt bought Acthar’s original maker, Questcor Pharmaceuticals, in 2014. Questcor had bought the rights to the drug from Aventis in 2001, then promptly raised its price from $40 a vial to $700 a vial and then to $2000 a vial. Questcor later restricted the drug’s distribution, allowing it to raise the price to $23,000 a vial.
Acthar is used to treat infantile spasms.
The suits allege monopolistic business practices and racketeering conspiracy under the Racketeer Influenced and Corrupt Organizations (RICO) Act.
Mallinckrodt and Express Scripts have emphatically stated that they believe the suit to be without merit.
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