Two whistleblowers claim that Questcor Pharmaceuticals, now part of Mallinckrodt, bribed physicians and staff to boost sales of its $39,000 drug, according to newly unsealed court documents obtained by CNN.
The whistleblowers alleged that the intentional "multitiered strategy," created a culture designed to sell H.P Acthar Gel at all costs, including lying to the FDA and offering kickbacks to physicians.
"Questcor has attempted to conceal and cover up its payment of kickbacks and its illegal promotion of H.P. Acthar Gel by making false statements to the FDA and directing employees to conceal evidence by failing to disclose ... the full nature and extent of its advertising, promotional and marketing materials and plan," the lawsuit reads, according to CNN.
The drug at the center of the lawsuit is a gel that treats a rare infant seizure disorder. The price of the drug has been hiked from $40 a vial in 2000 to nearly $39,000 a vial today.
The gel brings in annual sales of more than $1 billion, due to the price hike and an aggressive sales push to use it for other conditions, such as rheumatoid arthritis and multiple sclerosis.
The conduct of the drugmakers has cheated the government out of millions of dollars, the whistleblowers allege.
In a statement to CNN, Mallinckrodt said the fault lies primarily with Questcor, which Mallenkrodt acquired in 2014 as part of a $5.6 billion deal.
But the lawsuit extends the allegations to Mallenkrodt.
"The illegal practices that Questcor had been engaging in since 2007… have knowingly been continued since the merger and acquisition of Questcor by Mallinckrodt," the lawsuit claims.
The U.S. Justice Department filed notice last month to intervene in the lawsuit. It has 90 days to file a complaint of its own.
Read the full report here.