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City Settles for $3.3 Million from Pharmacy Benefit Manager
ROCKFORD, Ill. – 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.
During a review of spending, Rockford Consulting & Brokerage, the City’s insurance plan consultant, noticed a charge for nine vials of this drug totaling nearly a half-million dollars. Further review showed the drug had only cost $40 per vial in 2001. But, in 2015, the City was being gouged more than $34,000 per vial. It also appeared that neither the formula for the drug, nor its efficacy had changed from when it was discovered half a century ago.
In 2017, the City filed a lawsuit against Mallinckrodt, the makers of H.P. Acthar, and Express Scripts, the company tasked with negotiating prescription drug prices for the City, for anti-trust violations.
On July 8, 2024, City Council approved a settlement with Express Scripts for $3.3 million – which covers the cost of the drugs, plus fees.
“This has always been about more than just recouping our expenses,” says Mayor Tom McNamara. “Mallinckrodt and Express Scripts overcharged the City by over $400,000. Our objective was to hold these companies accountable, and our legal team, along with Haviland Hughes, did an outstanding job. However, the battle doesn’t stop here. We need substantial structural reform to prevent other companies from hiking prices on lifesaving medications.”
Mallinckrodt filed for bankruptcy in 2020, avoiding liability for its pricing scheme.
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