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The whistleblowers said that this effort was part of an intentional "multi-level strategy" of Questcor Pharmaceuticals, now Mallinckrodt, to increase sales of HP Acthar Gel, misleading the government millions of dollars.
The Justice Department has now intervened in the case after conducting its own thorough investigation – a sign that the government believes that the allegations made by the whistleblowers are credible. In a statement to CNN, Mallinckrodt did not deny the charges but said the blame lies primarily with Questcor.
The bomb charges reveal what whistleblowers see as a culture of selling the drug at all costs, from lying to the Food and Drug Administration to selling drugs to doctors.
The price increase, combined with an aggressive surge in sales in rheumatoid arthritis, multiple sclerosis and other areas, has propelled annual sales of the drug to more than a billion dollars.
In their lawsuit, whistleblowers said the drug manufacturer's conduct "deceived the federal government over millions of dollars that should not have been paid, thereby enriching [the company] and subject patients to unapproved, hazardous and potentially ineffective uses of H.P. Acthar Gel. "
"Questcor attempted to conceal and conceal its payment of kickbacks and illegal promotion of HP Acthar Gel by making false claims to the FDA and directing employees to conceal evidence by failing to disclose … nature and The extent of its advertisements, promotional material and marketing and plan. "
Mallinckrodt bought Questcor in 2014 under a $ 5.6 billion contract. "The illegal practices in which Questcor had been engaged since 2007," he said, "have been knowingly pursued since the merger and the acquisition of Questcor by Mallinckrodt".
The allegations of the whistleblowers were unsealed after the Department of Justice had filed on March 6 a notice to intervene in the lawsuit. The Department of Justice has 90 days to file its own complaint, according to the March filing.
In case of liability, Mallinckrodt could be required to pay up to three times the amount of fraud committed by the government, as well as penalties ranging from $ 5,500 to $ 11,000 for each false claim, under the law on the denunciation.
The Department of Justice declined to comment on this story.
In his statement to CNN, Mallinckrodt said that he was disappointed with the decision of the Justice Ministry to pursue the case and that he was cooperating with the agency. The drug maker also sought to stand out from its former owner, Questcor.
"The allegations focus mainly on the inherited conduct of Questcor," Mallinckrodt said.
"Mallinckrodt has fully cooperated with the DOJ in its review of this historic conduct, voluntarily providing documents and information to the government.While we are disappointed that the DOJ has chosen to pursue the lawsuit, we have engaged discussions for a settlement with the government in recent months.
"The company believes that these commercial and marketing claims will likely be resolved in the near term through ongoing negotiations.It is also convinced that a reasonable and manageable resolution for all parties is achievable. This is mainly the allegation of the pre-Mallinckrodt case, the acquisition of Acthar Gel, we do not envisage any impact on the way Mallinckrodt conducts its business today. . "
In its statement, the company called whistleblowers two former employees of Questcor. However, the complaint makes it clear that one of the employees remained after the 2014 merger and worked for Mallinckrodt. He left the company in June 2017.
After CNN published this story, Mallinckrodt sent an additional statement: "Mallinckrodt strongly disagrees with the content of the complaint and the sensational characterization of the allegations."
Marc Orlow, a lawyer representing both whistleblowers, praised the government's decision.
"Our clients are true heroes fighting a corrupt corporate culture that costs taxpayers hundreds of millions of dollars," he said.
Expert: "Bad sign" for the company
The government is not making the decision to intervene lightly in a whistleblowing affair, said Jennifer Arlen, a law professor at New York University, specializing in corporate law enforcement.
But cases alleging bribes in health care, Arlen added, can be "very difficult because pharmaceutical companies regularly have legitimate agreements to consult and research with doctors."
"The government must show that its intention was to reward doctors for their prescribing behavior," she said.
What will be interesting, Arlen said, is that the government uses its extensive prescription data from doctors to back up its case.
"Under the current administration, it appears that real efforts are being made to combat various forms of health care fraud, and I know that the DOJ uses data analysis to identify physicians who swindle the government, "she said. "The data could be used very effectively in a case like this."
CNN's survey last year found that Acthar manufacturers had paid millions of dollars to doctors.
According to CNN analysis of publicly identified prescribers, more than 80% of the physicians who filed Medicare claims in 2016 for Acthar received money or other benefits from the manufacturers of drugs.
The analysis, which examined physicians who filed more than 10 Part D claims, found that Mallinckrodt and Questcor had paid 288 prescribers more than $ 6.5 million for counseling, promotional communications and other services related to Acthar between 2013 and 2016.
$ 1,000 per gallon of gas
The whistle-blower prosecution had been under seal for seven years in the US District Court in the Eastern District of Pennsylvania since it was filed against Questcor in 2012. The lawsuit was amended to reflect Questcor's acquisition by Mallinckrodt in 2014.
When the government files a notice of intervention in a whistleblowing case, the complaint then becomes unsealed – in this case, the fourth amended complaint, filed on June 8, 2017. All other documents related to the Case remain sealed.
This is not the first time Mallinckrodt is facing a scrutiny from the government regarding Acthar. The pharmaceutical company reached a settlement of $ 100 million in 2017 after the Federal Trade Commission accused the drug maker of violating antitrust laws to prevent its competitors from selling at exorbitant prices . The company moved without admitting any fault.
The drug is approved for 19 indications, including multiple sclerosis, rheumatoid arthritis and kidney disease. Critics point out that the drug has been approved for many of these conditions well before the more stringent FDA standards and that there are few randomized clinical studies demonstrating its effectiveness, particularly in adults. .
"Medicare has spent billions of dollars on Acthar for questionable indications," said Dr. Dennis Bourdette, chair of the department of neurology at Oregon Health & Science University, who studied the price of the drug and the doctors the prescribing for years.
Charles Strunck, who worked for Questcor as a sales specialist for multiple sclerosis from September 2010 to August 2011, and Lisa Pratta, a specialist in neurology at Actcor at Questcor, then Mallinckrodt from September 2010 to June 2017, focused on complaint against whistleblowers.
According to the lawsuit, Mallinckrodt "is intentionally engaged in an illegal ploy aimed at increasing its sales and profits by engaging in" many illegal activities, including:
- Violate the federal anti-kickback law by "using incentives, rewards and other valuable forms of compensation to encourage health care providers to promote and prescribe" Acthar.
- "Systematic promotion and marketing of H.P. Acthar Gel for unapproved and off-label uses."
- "Causing hundreds or thousands of false claims of H.P. Acthar Gel to federal health care programs and their settlement."
Sales reps were royally rewarded for their increased sales, said the lawsuit, with lucrative monthly bonuses designed to promote a "sell at all costs" mentality. A sales specialist received a bonus of $ 124,000 in the second quarter of 2011, including $ 75,000 in one month only; another received a bonus of $ 110,000 in the same quarter, including $ 80,000 in one month, according to the lawsuit.
Representatives received a daily report "tracking the productivity of all specialists to motivate them".
"This practice continued after the merger with Mallinckrodt," said the prosecution.
The lawsuit alleges that Questcor was struggling to enter the MS market because there was a cheaper alternative that was considered the standard of treatment for MS flareups.
"Questcor's response to this challenge has been to bribe the doctors for what they prescribe and promote H.P. Acthar Gel," the lawsuit said.
The lawsuit went on to say that many doctors treating MS patients had refused to talk to Questcor's sales representatives, but the company had come up with a way around the problem: "One of the ways Questcor is using to overcome this obstacle is to corrupt the office staff to organize such meetings. "
Bourdette, Executive Director of the Multiple Sclerosis Center at Oregon Health & Science University, found these allegations particularly intriguing.
"In the field of multiple sclerosis, there is a very small number of doctors who prescribe Acthar, and I have never understood why these doctors do that," he said. "If these accusations are true, it may provide an explanation."
The price of the drug has been a source of controversy for over a decade, as it climbed overnight in August 2007 from $ 1,600 to $ 23,000 a vial. At the time, the drug was primarily intended for infantile spasms, a disabling disorder in infants.
Despite protests from the country's leading foundations of epilepsy and neurology groups against the high cost of the drug, the price of Acthar has risen by an additional $ 16,000 per vial. Today, the price is about $ 39,000 per vial.
Rising prices place it among the most spectacular drug price increases in the country's history, said Stephen Schondelmeyer, director of the PRIME Institute, a research organization that studies economic and political issues related to pharmaceuticals. .
"If the gas [prices] increased from 1993 to 2019 at the pace of H.P. Acthar, the gasoline would now cost $ 1,300 per gallon, "he said.
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