Drugmaker fined $100M for hiking price 85,000%

mallinckrodt

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 accused of price gouging last August when it hiked the price of the life-saving allergy treatment by 400% since 2009.

Original article: The Cruelty of Mallinckrodt

 

More bad guys to deal with.

There seems to be a never-ending horde of people committed to exploiting other people right in the middle of their weakness, pain, suffering, or loss.

In the very spirit of the word these people are murderers.

Ideally, the predator-company Mallinckrodt would have been broken up for their cruelty.

And important note: it is not intrinsically unfair if one man is a millionaire, or a billionaire, and another isn’t. Ambition, innovation, intelligence, talent, and opportunity are never the same for two people.

Making a profit is neither a crime nor a sin. You are expected to prosper in everything you do.

The egregious conduct of Mallinckrodt is not prospering. It is in no way part of ethical business, but is nothing less than preying on children right in the middle of their disease.

The children who suffer from multiple sclerosis are far less crooked than then men and women at Mallinckrodt.

The conduct of Mallinckrodt borders on sadism.

I hope this company vanishes from the Earth.

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