Mallinckrodt Pays $260 Million Over Rebate, Kickback Allegations

Mallinckrodt ARD LLC will pay $260 million to settle False Claims Act allegations of underpaying Medicaid rebates and that it used a foundation to pay illegal copay subsidies in violation of the Anti-Kickback Statute regarding its drug H.P. Acthar Gel, the Department of Justice said Monday.

Drug manufacturers are required to pay inflation-based rebates for drugs to state Medicaid programs. The rebates are designed to insulate Medicaid from price increases outpacing inflation.

Mallinckrodt admitted under the settlement agreement that Acthar was not a new drug as of 2013, which it allegedly claimed in order to underpay rebates to state Medicaid ...