Mallinckrodt pays $35 million to resolve claims of suspicious order monitoring

Mallinckrodt, a global business that develops, manufactures, markets and distributes specialty pharmaceutical products and therapies, has finalised its agreement with the US Drug Enforcement Agency (DEA) and two US Attorney’s Offices (USAOs), paying $35 million to settle claims of suspicious order monitoring.

The settlement does not include admission of liability for civil penalties for conduct by the company. Additionally, Mallinckrodt denies the allegations that it violated applicable laws linked to its suspicious order monitoring programme for controlled substances.

“We are proud of the fact that Mallinckrodt has long been an industry leader in actively combatting the serious issue of prescription drug abuse with a demonstrated record of meeting and exceeding the requirements of federal and state laws governing the manufacturing, sale and distribution of controlled substances,” said Michael-Bryant Hicks, general counsel, Mallinckrodt. “The company has been repeatedly commended by the DEA for its industry-leading anti-diversion programme, which we believe goes beyond the requirements of DEA regulations.

“While Mallinckrodt disagreed with the US government's allegations, we chose to resolve the legacy matter in order to eliminate the uncertainty, distraction and expense of litigation and to allow the company to focus on meeting the important needs of its patients and customers,” Hicks concluded.

Mallinckrodt stated in a press release that it believes that, ‘given the information currently available and after taking into account amounts already accrued, the resolution will not have a material adverse effect on its financial condition, results of operations or cash flows. The company had previously reserved for the full amount of the settlement, and expects no future impact on fully diluted earnings per share or adjusted fully diluted earnings per share.’