The state of Alaska received $2 million in an antitrust settlement in which a pharmaceutical company was accused of monopolizing the rights to a lifesaving drug in order to maintain massive price hikes.
The $100 million settlement was filed Jan. 18 in U.S. District Court for the District of Columbia. Alaska, Maryland, New York, Texas and Washington joined the Federal Trade Commission in the complaint against Mallinckrodt Ard, formerly known as Questcor Pharmaceuticals.
The settlement arose around antitrust allegations regarding a type of drug used to treat life-threatening maladies, including infantile spasms and nephritic syndrome.
In 2001, Questcor bought the rights to the drug Acthar for $100,000 and "modest royalties," the complaint says. Acthar, derived from pigs' pituitary glands, is an adrenocorticotropic hormone-based therapeutic drug.
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At the time, the drug cost $40 per vial. Quesctor went on to raise the price to more than $34,000 per vial — an 85,000 percent increase, the complaint says.
Then, in 2011, Questcor outbid other companies to acquire the rights to Synacthen Depot, a synthetic version of the drug.
It was this purchase that triggered the complaint from the FTC.
"To maintain its monopoly pricing, it acquired the rights to its greatest competitive threat … This is precisely the kind of conduct the antitrust laws prohibit," FTC chairwoman Edith Ramirez said in a statement.
As part of the settlement, Mallinckrodt will license Synacthen to a separate pharmaceutical company, Marathon Pharmaceuticals, which will be able to develop it for infantile spasms and nephritic syndrome.
Mallinckrodt retains the ability to develop the drug for other afflictions, the company wrote in a statement.
"We are pleased with the agreement reached to resolve this legacy matter, although we continue to strongly disagree with allegations outlined in the FTC's complaint," the company wrote in the release.
The company said its net sales won't be impacted, as the drug wasn't yet producing revenue. The settlement included no admission of wrongdoing, it said.
Alaska and the four other states each received $2 million, and the FTC will receive $90 million.
Under the settlement terms, Alaska's money is supposed to be used for research and treatment of conditions associated with the drug.
"It's going be tricky because we don't really have a research hospital like they do in other states," said Ed Sniffen, chief assistant attorney general.
But, if no research use can be found, there is an exception which allows the money to be used for Alaska's Medicaid program, Sniffen said.
Sniffen didn't know how many Alaskans were affected by the price increases, but said that some prescriptions for the drug were included in Medicaid reimbursements.
Alaska Attorney General Jahna Lindemuth called the price spikes "outrageous" in a statement.