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The Federal Trade Commission forced drug company Mallinckrodt Pharmaceuticals to pay over $100 million this week for engaging in illegal behavior involving drugs meant for treating infants with a rare form of epilepsy. After buying the rights to the drug that used to cost only $40, the company jacked up the price, reaching $34,000.
Mallinckrodt is, by no means, the first drug company to increase the price of life-saving medication by several thousand times. In this case, the company managed to buy the rights to the medication called Acthar Gel through a series of company acquisitions, the Daily Mail reports. This led to a monopoly, which allowed the company to raise its price as much as it wanted to.
The drug is used to treat infantile epilepsy, which occurs among children who have yet to reach one year old. It’s most commonly found in infants with cerebral palsy and Down Syndrome. Its rarer form is called infantile spasms, but both cause severe shaking that poses considerable discomfort and danger to the infants. The condition affects about 2,500 infants in the U.S. every year.
As a result of the inflated prices, Mallinckrodt made $1 billion off of the drug in 2015. There was another drug that parents could have turned to, which was sold by a company called Synacthen, but Mallinckrodt bought it and buried the drug in order to remove competition.
As to how Mallinckrodt got the attention of the FTC, it turns out that it was because of Martin Shkreli, Futurism reports. Those following the news would remember Shkreli as also engaging in jacking up prices of essential medication that placed them beyond the reach of average customers.
In 2014, Shkreli’s company, Retrophin, filed a lawsuit against Mallinckrodt for anti-competitive practices. He did this while, at the same time, raising the price of an anti-parasitic drug by 5,000 percent.
