STAINES-UPON-THAMES, United
Kingdom, June 1, 2020
/PRNewswire/ -- Mallinckrodt plc (NYSE:
MNK), a global biopharmaceutical company, announced today that it
will appeal a ruling by the U.S. District Court for the
District of Columbia in a lawsuit
filed by its subsidiary, Mallinckrodt ARD LLC, against
the U.S. Department of Health and Human Services (HHS) and the
Centers for Medicare and Medicaid Services (CMS), regarding the
Medicaid drug rebate calculation for Acthar® Gel
(repository corticotropin injection).
The District Court denied the Company's request to reconsider
its previous decision that declined to declare unlawful an action
by CMS to effectuate a change in the base date average manufacturer
price used to calculate those rebates. The Court also denied the
company's request that it temporarily block CMS' action pending an
appeal. The Company will immediately appeal to the U.S. Court
of Appeals for the D.C. Circuit, where it will seek to overturn the
lower court decision and temporarily block CMS action during the
appellate process.
"We are disappointed by the Court's unwillingness to reconsider
its previous decision. We believe the Court has misinterpreted the
statute that governs the Medicaid drug rebate program and failed to
hold the government accountable to a bedrock principle of
administrative law that the government must give fair notice and a
clear, legal basis for a change in policy, particularly when that
policy has been relied upon by a regulated entity such as
Mallinckrodt," said Mark Casey, Executive Vice President and Chief
Legal Officer of Mallinckrodt. "We
plan to immediately appeal to the U.S. Court of Appeals for the
D.C. Circuit. Mallinckrodt remains
committed to ensuring Medicaid patients have access to Acthar Gel
therapy for the long term."
In asking the Court to temporarily block CMS' action, the
Company described the risk that allowing CMS to move forward could
inhibit the Company's ability to fund research and development
activities, including COVID-19 related activities, and effectuate
its opioid settlement, among other issues.
As previously announced, in the absence of court intervention,
the company would pay roughly $640 million in retroactive
non-recurring charges from January 1,
2013 to March 27, 2020, and
the annualized prospective change to the Medicaid rebate
calculation would reduce Acthar Gel net sales by roughly $90
million to $100 million. Under a previous agreement with
the government, CMS has agreed to not enforce a change in the
Medicaid drug rebate calculation for Acthar Gel until at least
June 14, 2020.
ABOUT MALLINCKRODT
Mallinckrodt ARD LLC is a
subsidiary of Mallinckrodt, a global
business consisting of multiple wholly owned subsidiaries that
develop, manufacture, market and distribute specialty
pharmaceutical products and therapies. The company's Specialty
Brands reportable segment's areas of focus include autoimmune and
rare diseases in specialty areas like neurology, rheumatology,
nephrology, pulmonology and ophthalmology; immunotherapy and
neonatal respiratory critical care therapies; analgesics and
gastrointestinal products. Its Specialty Generics reportable
segment includes specialty generic drugs and active pharmaceutical
ingredients.
Mallinckrodt Pharmaceuticals uses its website as a channel of
distribution of important company information, such as press
releases, investor presentations and other financial information.
It also uses its website to expedite public access to time-critical
information regarding the company in advance of or in lieu of
distributing a press release or a filing with the U.S. Securities
and Exchange Commission disclosing the same information. Therefore,
investors should look to the Investor Relations page of the website
for important and time-critical information. Visitors to the
website can also register to receive automatic e-mail and other
notifications alerting them when new information is made available
on the Investor Relations page of the website.
CAUTIONARY STATEMENTS RELATED TO FORWARD-LOOKING
STATEMENTS
Statements in this document that are not strictly
historical, including statements concerning the dispute between
Mallinckrodt, HHS and CMS with regard
to Medicaid drug rebates for Acthar Gel; the litigation filed by
Mallinckrodt against HHS and CMS in
connection with this dispute including any related appeals; the
impact of such dispute and any such litigation on Mallinckrodt's ability to fund research and
development activities (including COVID-19 related activities) or
on its ability to effectuate its proposed opioid settlement; the
impact of any of the foregoing on Mallinckrodt's future financial condition,
operating results, ability to fund future investments in Acthar
Gel, and patients' ability to access Acthar Gel; and any other
statements regarding events or developments that Mallinckrodt believes or anticipates will or may
occur in the future, may be "forward-looking" statements within the
meaning of the Private Securities Litigation Reform Act of 1995,
and involve a number of risks and uncertainties.
There are a number of important factors that could cause actual
events to differ materially from those suggested or indicated by
such forward-looking statements and you should not place undue
reliance on any such forward-looking statements. These factors
include risks and uncertainties related to, among other things: the
dispute between Mallinckrodt, HHS and
CMS, including the outcome of the lawsuit filed by Mallinckrodt and any related appeals, as well as
the time and expense of litigating this dispute; the impact of this
dispute on Mallinckrodt's expectations
for performance in 2020, as well as the potential retroactive
financial impact on Mallinckrodt of an
adverse outcome or any other impacts; governmental investigations
and inquiries, regulatory actions and lawsuits brought against
Mallinckrodt by government agencies and
private parties with respect to its historical commercialization of
opioids, including the non-binding agreement in principle regarding
terms and conditions of a global settlement to resolve all current
and future opioid-related claims; scrutiny from governments,
legislative bodies and enforcement agencies related to sales,
marketing and pricing practices; pricing pressure on certain of
Mallinckrodt's products due to legal
changes or changes in insurers' reimbursement practices resulting
from recent increased public scrutiny of healthcare and
pharmaceutical costs; the reimbursement practices of governmental
health administration authorities, private health coverage insurers
and other third-party payers; complex reporting and payment
obligations under the Medicare and Medicaid rebate programs and
other governmental purchasing and rebate programs; cost containment
efforts of customers, purchasing groups, third-party payers and
governmental organizations; changes in or failure to comply with
relevant laws and regulations; Mallinckrodt's and its partners' ability to
successfully develop or commercialize new products or expand
commercial opportunities; Mallinckrodt's ability to navigate price
fluctuations; competition; Mallinckrodt's and its partners' ability to protect
intellectual property rights; limited clinical trial data for
Acthar Gel; clinical studies and related regulatory processes;
product liability losses and other litigation liability; material
health, safety and environmental liabilities; potential
indemnification liabilities to Covidien pursuant to the separation
and distribution agreement; business development activities;
retention of key personnel; the effectiveness of information
technology infrastructure including cybersecurity and data leakage
risks; customer concentration; Mallinckrodt's reliance on certain individual
products that are material to its financial performance;
Mallinckrodt's ability to receive
procurement and production quotas granted by the U.S. Drug
Enforcement Administration; complex manufacturing processes;
conducting business internationally; Mallinckrodt's ability to achieve expected benefits
from restructuring activities; Mallinckrodt's significant levels of intangible
assets and related impairment testing; labor and employment laws
and regulations; natural disasters or other catastrophic events;
Mallinckrodt's substantial indebtedness
and its ability to generate sufficient cash to reduce its
indebtedness; future changes to U.S. and foreign tax laws or the
impact of disputes with governmental tax authorities; the impact of
Irish laws; and the impact of the outbreak of the COVID-19
coronavirus.
These and other factors are identified and described in more
detail in the "Risk Factors" section of Mallinckrodt's Annual Report on Form 10-K for the
fiscal year ended December 27, 2019
and the "Risk Factors" section of Mallinckrodt's Quarterly Report on Form 10-Q for
the quarterly period ended March 27,
2020. The forward-looking statements made herein speak only
as of the date hereof and Mallinckrodt
does not assume any obligation to update or revise any
forward-looking statement, whether as a result of new information,
future events and developments or otherwise, except as required by
law.
CONTACTS
Investor Relations
Daniel J. Speciale, CPA
Vice President, Investor Relations and IRO
314-654-3638
daniel.speciale@mnk.com
Media Inquiries
Ron
Bartlett
H+K Strategies
Senior Vice President
813-545-2399
ron.bartlett@hkstrategies.com
Government Affairs
Mark Tyndall
Senior Vice President, Government Affairs
& Chief Counsel, Litigation
202-383-0090
mark.tyndall@mnk.com
Mallinckrodt, the "M" brand mark and
the Mallinckrodt Pharmaceuticals logo are trademarks of a
Mallinckrodt company. Other brands are
trademarks of a Mallinckrodt company or
their respective owners. © 2019 Mallinckrodt. 9/19
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SOURCE Mallinckrodt plc