Mallinckrodt has agreed to pay $100 million to settle allegations that a subsidiary broke U.S. antitrust law by sharply increasing the price of a multiple sclerosis drug while ensuring that no rival medicine appeared on the market, the Federal Trade Commission said on Wednesday.
Mallinckrodt's share price dropped sharply to just under $43 from above $49 on a report Wednesday, which proved incorrect, that the FTC would sue Mallinckrodt. It spiked above $50 after news of a settlement and closed at $46.53, down 5.8 percent.
In 2001, Questcor bought the rights to Acthar, a type of hormone-based drug used to treat infantile spasms as well as multiple sclerosis. Over time, the company raised the price from $40 per vial to more than $34,000, the FTC said. Questcor was acquired by Mallinckrodt in 2014.
Acthar, which is off patent, represented 34 percent of Mallinckrodt's $3.4 billion in net sales for fiscal 2016, the company said in a government filing.
Per patient, Medicare spent more on Acthar than for any other drug in 2015, putting out $504 million for just 3,104 patients, according to the Medicare Drug Spending Dashboard.