Two whistleblowers from a pharmaceutical company responsible for one of the largest drug price increases in U.S. history claim the company bribed doctors and their staffs to boost sales. The whistleblowers said in a lawsuit against the company, the effort was part of an intentional “multi-tiered strategy” by Questcor Pharmaceuticals.
CNN reports that the price of one particular drug, known for treating a rare infant seizure disorder, increased in price by nearly 97,000 percent. A vial cost $40 back in 2000, whereas it now costs $39,000.
The Justice Department intervened in the case after conducting its own extensive investigation. Mallinckrodt did not deny the accusations in a statement to CNN, though it did say the fault lies primarily with Questcor.
According to the whistleblowers, Questcor Pharmaceuticals, now Mallinckrodt, tried to sell the drug at all costs, and even lied to the Food and Drug Administration, offering bribes to doctors.
The drug’s annual sales are over $1 billion since the price increase. CNN conducted an investigation last year, which found that Medicare spending on Acthar had risen dramatically to some $2 billion.
Within their lawsuit, the whistleblowers said the drugmaker’s conduct “has cheated the federal government out of millions of dollars that should not have been paid, thereby enriching [the company] and subjecting patients to unapproved, unsafe and potentially ineffective uses of H.P. Acthar Gel.”
“Questcor has attempted to conceal and cover-up its payment of kickbacks and its illegal promotion of H.P. Acthar Gel by making false statements to the FDA and directing employees to conceal evidence by failing to disclose … the full nature and extent of its advertising, promotional and marketing materials and plan.”
According to the suit, Questcor had been engaging in illegal practices since 2007. The company was also aware of these crimes since the merger and acquisition of Questcor by Mallinckrodt.
Mallinckrodt could be required to pay up to three times any amount the government is found to have been defrauded if the company is found liable. In addition, it could be faced with penalties ranging from $5,500 to $11,000 for each false claim, according to the whistleblower statute.