Big Pharma Watch: Drug Maker Hit With $15 Million Penalty for Illegal Price Hike Scheme

In case you missed it, a recent article in HealthLeaders details how brand name drug maker Mallinckrodt used a foundation to secretly hike the price of the drug Acthar from $50 to $32,200 over a 13-year period, all while marketing the drug as ‘free’ in an illegal kickback scheme.

The company used kickbacks in the form of copays to doctors and patients to quell concerns over the sky-rocketing price of Athcar, a drug used to treat multiple sclerosis and potentially fatal infant spasms. Mallinckrodt would use its foundation to funnel these kickbacks through three funds to pay only for Medicare copays on the drug.  Even worse, Mallinckrodt would ‘wine and dine’ doctors to convince them to write prescriptions for Athcar over the drug’s competitors all in a quest to raise their profits.

Thanks to whistleblowers, Mallinckrodt was found guilty under the False Claims Act and Anti-Kickback Statute and will have to pay the U.S. federal government $15 million to resolve the allegations. But unfortunately, this isn’t the only example of Big Pharma using the guise of generosity to further enable their price-gouging behavior.  The Economist recently outlined how Big Pharma uses charities as a vehicle to boost their bottom line.

These sort of egregious practices and price-gouging behavior surely contribute to Big Pharma’s recent ranking as the most poorly regarded industry in America.

Now that Congress is back in session, lawmakers simply must act to stop Big Pharma’s price-gouging and lower prescription drug prices for struggling Americans.