According to the law firm press release, on August 14, 2014, Mallinckrodt acquired Questcor Pharmaceuticals, Inc. ("Questcor") in a $5.6 billion transaction. As a result of the acquisition, Mallinckrodt added HP Acthar Gel ("Acthar"), an injectable medication made from pigs' pituitary glands, to its drug portfolio. Acthar is the only approved therapeutic preparation of adrenocorticotropic hormone ("ACTH") in the U.S., and is approved by the U.S. Food and Drug Administration ("FDA") as a treatment for 19 different conditions, including infantile spasms, and difficult-to-treat autoimmune and inflammatory conditions. Given the monopoly status of Acthar in the U.S. market, Questcor, and later Mallinckrodt, repeatedly increased the price of Acthar 85,000% from $40 per vial in 2001 to over $34,000 per vial in 2017.
The complaint alleges that, throughout the Class Period, Mallinckrodt and its Chief Executive Officer ("CEO") made a series of false and misleading statements and failed to disclose material adverse facts about the long-term sustainability of the Company's monopolistic Acthar revenues and the exposure of Acthar to reimbursement rates by Medicare and Medicaid. Specifically, Defendants made false and/or misleading statements and/or failed to disclose that Acthar's monopoly status as the only FDA-approved ACTH preparation was the product of unlawful anticompetitive practices and failed to disclose that its increasing reliance on Medicare and Medicaid meant that the Company's monopolistic Acthar revenue would be threatened if the government took action to limit the price paid for this drug by taxpayers.
On March 9, 2018, the Court issued an Order appointing Lead Plaintiff and Counsel and consolidating related actions. Lead Plaintiff filed a consolidated Complaint on May 18. Defendants filed a Motion to Dismiss the consolidated Complaint on July 17.
One of the individual Defendants was voluntarily dismissed on August 30, 2018.
On July 30, 2019, the Court issued an Order granting in part and denying in part Defendants' Motion to Dismiss.
On October 12, 2020, Mallinckrodt plc and its affiliated debtors commenced bankruptcy cases in the United States Bankruptcy Court for the District of Delaware. The Court stayed the case on October 13.