Marietta Sues Drugmaker Over $38,960 Price Hike

The City of Marietta is filing a class action lawsuit against drug manufacturer, Mallinckrodt Pharmaceuticals over a drug that went from $40 to more than $39,000. The drug in question is Acthar, a medication used to treat infantile seizures, and it is currently utilized by many of the city’s public employees.

That Atlanta Journal Constitution reports that the city has already spent over $2 million on a prescription for one patient. Acthar was first approved in the 1950s, and today is used primarily to treat infantile spasms — a seizure disorder in babies. It has other uses as well.

Marietta claims that the company has been able to keep price inflated because they own the rights to formulas for cheaper generic alternatives, and they’ve been shelving them.

While the price hike is undeniably egregious, it is not unprecedented. Vanderbilt University School of Medicine health policy professor Stacie Dusetzina cautions that it’s perfectly legal and will likely happen again.

“A company can choose to do this to any drug a person is taking at any time,” she said. “I think it’s important for people to realize this has some particularly egregious elements, but this is not the only drug where we see this behavior.”

A spokesperson for Mallinckrodt, which settled a Federal Trade Commission lawsuit over alleged antitrust violations for $100 million in 2017, said the company had not yet been served with the suit, but the claims were exaggerated.

“Under our stewardship, any price adjustments to Acthar have been limited to the mid-single digit percentage range,” the statement said, adding that the company has invested more than $600 million in the drug.

Experts and antirust lawyers say that these litigation fees are considered the cost of doing business by an industry that consistently sees year-over-year profits. In 2018, Medicare spent $725 million on Acthar for fewer than 2,500 patients.