Rockford to settle lawsuit accusing drug company of price-gouging for $3.3M
By Kevin Haas
Rock River Current
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ROCKFORD — The city will receive $3.3 million to settle a lawsuit that accused a pharmaceutical giant of price gouging on a medication that treats a rare form of infant epilepsy.
City Council members voted unanimously Monday night to approve the settlement. The money will go to replenish the city’s health fund, which officials say was drained of hundreds of thousands of dollars when two employees needed the drug for their children.
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The city filed a lawsuit in 2017 against Mallinckrodt, who are the makers of the drug, and Express Scripts, the company tasked with negotiating prescription drug prices for the city. The suit said that Rockford was charged $489,058 for a drug called H.P. Acthar Gel in 2015.
City officials said the drug had cost $40 per vial in 2001, but increased to tens of thousands of dollars by 2015. Neither the formula for the drug, nor its efficacy had changed from when it was discovered half a century ago, the city said.
The spike in cost was brought to the city’s attention by Rockford Consulting & Brokerage, the city’s insurance plan consultant, which noticed a charge for nine vials of H.P. Acthar Gel totaling nearly $500,000.
Mallinckrodt, which was also ensnared in a lawsuit that claimed it profited from the U.S. opioid epidemic, filed for Chapter 11 bankruptcy protection in 2020. The company emerged from bankruptcy late last year, but avoided liability for its pricing scheme, city officials said.
“This has always been about more than just recouping our expenses,” Mayor Tom McNamara said in a statement released after the council’s vote. “Mallinckrodt and Express Scripts overcharged the City by over $400,000. Our objective was to hold these companies accountable, and our legal team, along with Haviland Hughes, did an outstanding job. However, the battle doesn’t stop here. We need substantial structural reform to prevent other companies from hiking prices on lifesaving medications.”
This article is by Kevin Haas. Email him at khaas@rockrivercurrent.com or follow him on X at @KevinMHaas or Instagram @thekevinhaas and Threads @thekevinhaas
