ROCKFORD (WREX) — The City of Rockford's $10 billion lawsuit against a pharmaceutical company has been put on hold by a bankruptcy court.
On Nov. 23, the Delaware Federal Court handling the Mallinckrodt bankruptcy issued a sweeping injunction, putting a stay on Rockford’s lawsuit against Express Scripts for its role in an unlawful pricing scheme.
“We may lose a battle or two in this fight for justice for our hard-working citizens, but we will win the war against Mallinckrodt and Express Scripts to stop them from getting rich by inflating the price of life-saving drugs,” says Rockford Mayor Tom McNamara.
“It is a travesty of the justice system that a bad drug company, like Mallinckrodt, could run to bankruptcy court for protection to avoid having to face the patients and payors it has defrauded for years,” said Don Haviland, Rockford’s litigation counsel.
The city filed the lawsuit in 2017 against pharmaceutical giant Mallinckrodt and Express Scripts for antitrust violations.
In 2015, two children of employees of the City of Rockford were diagnosed with rare infant epilepsy disorders. The best treatment of this life endangering condition is the drug H.P. Acthar Gel, which cost just $40 a vial in 2001.
By 2015, the city says Mallinckrodt had conspired with the pharmacy benefit manager Express Scripts to inflate the price to more than $34,000 per vial. Mallinckrodt now charges more than $46,000 per vial, an increase of more than 100,000% since 2001.
The city says their lawsuit seeks to return more than $10 billion to other cities, counties, and health plans who are part of the lawsuit.
In the beginning of October of this year, Mayor McNamara provided a statement to the US House Oversight Committee assisting its investigation of Mallinckrodt. The Oversight Committee’s 42-page report found that without significant structural reforms companies like Mallinckrodt will continue to raise prices on critical lifesaving medications.
Two weeks later Mallinckrodt filed for bankruptcy to avoid Rockford’s lawsuit. Immediately Mallinckrodt sought to stay Rockford’s case against Express Scripts, even though the alleged unlawful conduct is continuing to this day.
The City of Rockford says during the bankruptcy proceeding, their lawyers uncovered that Mallinckrodt has not changed the way it is doing business with respect to Acthar.
Mallinckrodt has not altered either its pricing or marketing of Acthar, which Rockford and others have sued over. Now, Mallinckrodt has succeeded in staying the claims against its co-conspirator, Express Scripts, according to the City of Rockford.
Haviland vowed to continue to fight for the rights of patients and payors for fair pricing for Acthar Gel.
“The Court’s injunction against Express Scripts only means that justice will be further delayed another 9 months, but we will be ready to try our cases against Express Scripts this time next year,” he said.