On January 18, 2017, the Federal Trade Commission (“FTC”) announced that it reached a $100 million settlement with pharmaceutical company Questcor Pharmaartinceuticals, Inc. and its Irish parent company, Mallinckrodt plc. The settlement resolves charges of alleged monopolization and other antitrust violations. The investigation involved Mallinckrodt’s adrenocorticotropic hormone (“ATCH”) specialty drugs, primarily prescribed to treat infantile spasms, a rare disease that is costly to treat. The settlement also includes several state attorneys general, including Alaska, Maryland, New York, Texas and Washington.

According to the FTC complaint, Mallinckrodt originally acquired the rights to Acthar, a brand-name ATCH drug in 2001 for $100,000. Twelve years later, Mallinckrodt acquired the rights to a competing ATCH drug named Synacthen Depot, which had been prescribed in Europe, Canada, and other countries. The FTC did not challenge the acquisition of Snachthen Depot at the time. It now alleges, however, that the acquisition violated the antitrust laws, because it stifled competition by preventing any other company from using the Synacthen assets to develop a synthetic ACTH drug, preserving Questcor’s monopoly and allowing it to maintain high prices for Acthar. Specifically, FTC Chairwoman Edith Ramirez stated “Questcor took advantage of its monopoly to repeatedly raise the price of Acthar, from $40 per vial in 2001 to more than $34,000 per vial today – an 85,000 percent increase.”