LAS VEGAS (KLAS) — Nevada will get $1.7 million as part of a nationwide settlement with pharmaceutical giant Mallinckrodt, ending a dispute over underpaid Medicaid rebates.
Mallinckrodt, formerly Questcor, agreed to a $233.7 million settlement joined by all 50 states after allegations that the company violated the Federal False Claims Act — and the Nevada False Claims Act in the Silver State. The violations involved rebates for the drug H.P. Acthar Gel (Acthar) from Jan. 1, 2013, through June 30, 2020.
Medicaid’s drug rebate program requires manufacturers to pay the difference if a drug’s price rises faster than the rate of inflation. Acthar was originally introduced in 1952, but Mallinckrodt tried to classify it as a new drug in 2013.
Mallinckrodt “ignored all pre-2013 price increases when calculating and paying Medicaid rebates for Acthar from 2013 until 2020. In particular, the government alleges that Acthar’s price had already risen to over $28,000 per vial by 2013; therefore, ignoring all pre-2013 price increases for Medicaid rebate purposes significantly lowered Medicaid rebate payments for Acthar,” according to a news release from Nevada Attorney General Aaron D. Ford’s office in Carson City.
The settlement will be paid over seven years.
“My office will not stop going after those who would seek to defraud our state and our healthcare and Medicaid system,” Ford said. “I would like to thank the office’s Medicaid Fraud Control Unit for the vital work they do – this is just the latest win they have delivered for the state of Nevada.”
Under the settlement agreement, Mallinckrodt admitted that Acthar was not a new drug.