On a recent 60 Minutes episode, Lesley Stahl interviewed the former mayor of Rockford, Illinois Larry Morrissey. Stahl and Morrissey discussed Rockford’s suit against Mallinckrodt Pharmaceuticals due to the outrageous price of a drug called Acthar Gel.
Acthar Gel is used to treat infantile spasms in infants and children under the age of 2, and the town of Rockford’s health care plan currently covers two babies that are prescribed the medication. In 2011, Acthar Gel cost around $40 a vial but now the cost is more than $40,000 per vial. The city was paying out nearly a half a million dollars to cover the medications for two babies on top of the other medical needs of the rest of the 3,000 people enrolled in the plan.
Rockford is suing the pharmaceutical company to set a reasonable and fair price for the drug and for $5 million “to recover inflated payments, interest, damages and punitive damages.” The class action complaint states that Mallinckrodt is “exercising monopoly power, and engaging in other unlawful acts and practices” because as the only manufacturer of Acthar gel, patients “had nowhere else to turn for treatment.”
The price for the medication skyrocketed after Mallinckrodt purchased Questcor Pharmaceuticals in 2014.
The CEO of Mallinckrodt, Mark Trudeau, made an 8-minute video of his own in defense of the ludicrous price of the drug where he called Acthar Gel one of the company’s “most important therapies.” Trudeau claims that the previous owners “under-invested in Acthar” and Mallinckrodt has “invested hundreds of millions of dollars into Acthar to take the product to the next level and ensure increased patient access.”
So, the company claims the 100,000% price hike of the drug is due to the cost of clinical studies, and perhaps that does have something to do with it. However, it should be noted that Mallinckrodt increased profits to over $3 billion since purchasing the company from Questcor who was already pulling in $2 billion in profits, and Trudeau managed to give himself a 2.5 million dollar raise last year. Clearly, not all the extra cost of Acthar is being funneled into research programs.
Watch the 60 Minutes report below: