In an unexpected development, Mallinckrodt (MNK) filed a lawsuit accusing the federal government of illegally resetting a benchmark used for calculating rebates the company must pay to Medicaid for its most important drug, a move that could cost it hundreds of millions of dollars and hobble its R&D efforts going forward.

At issue is the amount of money the company owes the Centers for Medicare and Medicaid Services for its controversial Acthar Gel treatment, which is used primarily to treat infantile spasms and has been a poster child for the high cost of medicines. Over the past five years, the wholesale price rose 20% and a vial now costs around $39,000, making the drug an expensive proposition for public and private payers.

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  • These worthies obviously either did not read these words of Mr Chief Justice John Roberts last month – or just disagree? “I can certainly see that suing the people who are trying to prosecute you may not be the best strategy,”

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