Mallinckrodt Agrees to Pay $260 Million to Settle Lawsuits Alleging Underpayments of Medicaid Drug Rebates and Payment of Illegal Kickbacks

Mallinckrodt Agrees to Pay $260 Million to Settle Lawsuits Alleging Underpayments of Medicaid Drug Rebates and Payment of Illegal Kickbacks
Pharmaceutical company Mallinckrodt ARD LLC (formerly known as Mallinckrodt ARD Inc. and previously Questcor Pharmaceuticals Inc. (Questcor)) (collectively Mallinckrodt), has agreed to pay $260 million to resolve allegations that Mallinckrodt violated the False Claims Act by knowingly: 1. underpaying Medicaid rebates due for its drug H.P. Acthar Gel (Acthar); and 2. using a foundation as a conduit to pay illegal co-pay subsidies in violation of the Anti-Kickback Statute for Acthar. In 2019 and 2020, respectively, the government filed separate complaints detailing these allegations. The settlement, which is based on Mallinckrodt’s financial condition, required final approval of the U.S. Bankruptcy Court for the District of Delaware, which approved the settlement on March 2.