City of Rockford $10 Billion Lawsuit Against Pharmaceutical Giant Mallinckrodt Threatened by Bankruptcy

·2-min read

In 2015, two children of employees of the City of Rockford were diagnosed with rare infant epilepsy disorders. The best treatment of this life endangering condition is the drug H.P. Acthar Gel, which cost just $40 a vial in 2001. By 2015, Mallinckrodt had conspired with the pharmacy benefit manager Express Scripts to inflate the price to more than $34,000 per vial. Mallinckrodt now charges more than $46,000 per vial, an increase of more than 100,000% since 2001.

In April 2017, Rockford sued Mallinckrodt and Express Scripts for antitrust violations. Rockford’s lawsuit seeks to return more than $10 billion to other cities, counties, and health plans who are part of the City’s lawsuit. Earlier this month, Mayor McNamara provided a statement to the US House Oversight Committee assisting its investigation of Mallinckrodt. The Oversight Committee’s 42-page report found that without significant structural reforms companies like Mallinckrodt will continue to raise prices on critical lifesaving medications.

Last week, Mallinckrodt filed for bankruptcy putting a stay on the current lawsuit in an attempt to avoid liability for its pricing scheme. The City of Rockford is now encouraging the Bankruptcy Trustee to include a representative from the City’s class action lawsuit on the bankruptcy committee – which will decide, among other things, how unsecured creditors are paid.

"We think it’s imperative that the City of Rockford have a seat at the table during the bankruptcy proceedings," says Mayor Tom McNamara. "We have led this fight for the last three years, and we will continue to do so until companies like Mallinckrodt stop getting rich on the backs of taxpayers and at the peril of our youngest citizens."

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Contacts

Laura Maher, Strategic Communications Manager
Phone: 779-348-7331
E-mail: Laura.Maher@rockfordil.gov