"The anti-competitive practice by Mallinckrodt engineered 97,000% price hike of Acthar drug."

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Spending on drugs is increasing at a higher rate in the US than any other medical spending^1;p3. Some studies estimated that the increase is as high as 75% since 2007^1;p3. In mid-2020, twenty-six leading drug manufacturers in the US were accused of driving up generic drug prices illegally². Price rigging reduces purchasing power and affects mostly the lower income society^3;p90.

H.P. Acthar, a drug owned by Mallinckrodt, is used to treat Multiple Sclerosis (MS) that affects around 400,000 people in the US^4;p13. It is also used to treat 2,500 kids a year in the US affected by infantile spasms⁵.

Acthar is one of the most expensive drugs in the US, the price of which increased by 97,000% from $40 in 2001 to more than $39,000 per vial in 2018⁶. While general inflation rate in the US between 2001 and 2018 was 41.8%⁷. Mallinckrodt engaged in anti-competitive practice to illegally boost the demand of the drug by using a charitable foundation, and they bribed doctors to prescribe Acthar⁶. Also, Mallinckrodt created a monopoly by acquiring a competing drugs, Synacthen Depot, from Novartis, which it abandoned without developing it for the US market⁶.

According to a study published in a British medical journal, more than 200 physicians were very frequent in prescribing Acthar and 88% of them received payments from Mallinckrodt for doing that⁶. The payment was even more than $10,000 for 20% of physicians⁶. The study concluded, for every $10,000 spent on the physicians resulted in extra $53,000 in Medicare spending on Acthar⁸. This activity led Mallinckrodt’s revenue from Medicare to reach $725 million in 2018 from $50 million in 2011⁵. Mallinckrod earns around $1 billion every year from Acthar⁹. Overall, the drug is responsible for one third of the company’s net revenues in recent years⁹.

To summarize, Mallinckrod made significant amount of money by making Acthar unaffordable for many through it anti-competitive practice.

Sources

• 1. https://www.law.uh.edu/hjhlp/volumes/Vol_19/6%20-%20Sydney%20Reed%20(pp%20167-196).pdf
• 2. https://www.reuters.com/article/us-usa-drugs-antitrust-lawsuit-idUSKBN23H2TR
• 3. https://www.nacf.org.za/anti-corruption-summits/third_summit/UnitedNationsReport_summit3_Chapter7.pdf
• 4. https://www.mallinckrodt.com/globalassets/images/acthar/h.p.-acthar-gel-clinical-value-presentation-03-27-19.pdf
• 5. https://khn.org/news/mallinckrodt-orphan-drug-acthar-turned-cash-cow-as-drugmaker-raised-price-to-40000-per-vial-emails-show/
• 6. https://medcitynews.com/2019/08/humana-sues-drugmaker-mallinckrodt-over-alleged-price-gouging/?rf=1
• 7. https://www.usinflationcalculator.com/inflation/consumer-price-index-and-annual-percent-changes-from-1913-to-2008/
• 8. https://www.bmj.com/content/365/bmj.l2043.full
• 9. https://www.mallinckrodt.com/about/news-and-media/news-detail/?id=26496

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