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Mallinckrodt to pay $100m to settle US charges on drug pricing

PBR Staff Writer Published 19 January 2017

Mallinckrodt has agreed to pay $100m to settle the US Federal Trade Commission (FTC) and state charges that it illegally maintained its monopoly of specialty drug used to treat infants.

The Ireland based pharma maintained that it did not admit to any wrongdoing in the acquisition deal of synthetic ACTH product Synacthen Depot by Questcor Pharmaceuticals from Novartis in 2013.

Synacthen Depot joined Mallinckrodt's portfolio following the latter’s acquisition of Questcor in 2014.

The FTC had complained that Questcor had taken advantage of the monopoly of its ACTH drug Acthar by repeatedly increasing its price.

FTC Chairwoman Edith Ramirez said: “We charge that, to maintain its monopoly pricing, it acquired the rights to its greatest competitive threat, a synthetic version of Acthar, to forestall future competition. This is precisely the kind of conduct the antitrust laws prohibit.”

Under the settlement agreement with the FTC, Mallinckrodt will now license the synthetic ACTH product to Marathon Pharmaceuticals, which was identified by the industry watchdog.

Marathon subsequently will develop and pursue approval of Synacthen Depot possibly from the US Food and Drug Administration (FDA) for the treatment of Infantile Spasms (IS) and Nephrotic Syndrome (NS).

A Mallinckrodt spokesperson said: "Removing the distraction of litigation enables us to focus on advancing our increasingly diversified portfolio of medicines for the benefit of patients. The resolution also allows us to retain the rights to continue manufacturing and marketing Synacthen Depot to patients in other countries around the world where we already have rights.”

The exclusive rights to the Synacthen trademark in the U.S. will also be acquired by Marathon.

Mallinckrodt, under the agreement terms, will pay $10m to the states of Alaska, Maryland, New York, Texas, and Washington by 90 days. Additionally, it will also compensate for the states’ legal fees with a payment of $2m.

Mallinckrodt will continue to hold rights to continue development of product for all other indications in the US, including possible use in Duchenne Muscular Dystrophy (DMD) treatment.

The company will continue to own rights to product in all other countries with the exception of the US.