Akorn Operating Co., a Gurnee, Ill.-based drugmaker that shut down in late February after years of manufacturing violations and dwindling finances, settled for $7.9 million in a lawsuit involving Medicare false claim allegations.
A few months before its sudden closure — which may hinder efforts to resupply the nation's stock of liquid albuterol — Akorn paid nearly $8 million to resolve the case in September, according to the Justice Department. In its settlement, the company admitted to selling generic drugs through obsolete, prescription-only labeling.
Medicare Part D pays only for prescription drugs, and Akorn admitted to delaying the conversion from prescription-only to over-the-counter status. The three products were Diclofenac (diclofenac sodium 1%), a nonsteroidal anti-inflammatory cream; Olopatadine (olopatadine hydrochloride 0.1% and 0.2%), an antihistamine eye drop; and Azelastine (azelastine hydrochloride 0.15%), an antihistamine nasal spray.
Before this settlement, Akorn's financial history was rocky for years, according to the Herald & Review. In 2018, Fresenius Kabi walked out of a $4.75 billion deal with Akorn because of manufacturing safety discrepancies. It then filed for bankruptcy in 2020 but stabilized later that year when its sale was approved to existing lenders.
On Feb. 22, 2023, Akorn filed for bankruptcy again, laid off hundreds and closed all operations.