The drug company providing a hormone treatment for infantile spasms - a severe form of infant epilepsy affecting babies with health problems like cerebral palsy, Down syndrome, and tuberous sclerosis - is one in a growing list of pharmaceutical companies that sharply raise prices after acquiring a new drug.
Mallinckrodt Pharmaceuticals settled with the U.S. Federal Trade Commission for $100 million, after accusations that it unreasonably jacked up the price of Acthar Gel and engaged in anti-competitive activity in an effort to maintain its monopoly on the treatment.
Acthar Gel, a hormone injection used to treat infantile spasms, was acquired by Mallinckrodt when it bought Questor Pharmaceuticals in 2014. Before Questor bought the drug in 2001, it sold for $40 a vial. In 2012, under Questor, the price was raised to $28,000 a vial. After Mallinckrodt acquired the drug from Questor, the price went up even higher to $34,000 per vial. This inflated pricing generated more than $1 billion in revenue for Mallinckrodt in 2015.
But the company didn't stop there. Mallinckrodt bought out its only competitor in the market, Synacthen, and then put it on a shelf to gather dust.
Synacthen has been used widely outside the U.S. to treat infantile spasms, but Mallinckrodt claimed it would be too costly to attempt providing the treatment in America:
“The company argued in its statement that the resources necessary to develop Synacthen in the U.S. would be considerable and pointed out that trials could be difficult to conduct because patients would have to forego a known treatment, Acthar,” according to Carolyn Y. Johnson of The Washington Post.