Mallinckrodt plc confirmed Tuesday that it has finalized the agreement reached with the U.S. Drug Enforcement Administration (DEA) and the U.S. Attorneys’ Offices (USAOs) for the Eastern District of Michigan and the Northern District of New York, respectively, to settle previously disclosed investigations relating to the company’s suspicious order monitoring program, reporting, record keeping, and security measures related to manufacturing and distribution of 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 program, which we believe goes beyond the requirements of DEA regulations.”
In reaching this resolution, the company denies government allegations that it violated applicable laws in connection with its suspicious order monitoring program, and the settlement contains no admission of liability for civil penalties for relevant conduct.
“While Mallinckrodt disagreed with the U.S. 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,” Mr. Hicks concluded.
Mallinckrodt will pay $35 million to resolve all potential claims as part of the agreement. As previously disclosed, Mallinckrodt 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.
Mallinckrodt’s Responsible Use Programs
In addition to its suspicious order monitoring program, Mallinckrodt has invested millions of dollars in a comprehensive program to address opioid abuse and misuse. The company reaffirms its commitment to working with policy makers, community leaders, law enforcement and industry partners to ensure the responsible use of pain medication and prevent unused medications from ending up in the wrong hands.
Mallinckrodt’s multi-pronged approach includes:
- The purchase and donation of more than 1.5 million drug deactivation pouches1 to help combat one of the top public health threats in the U.S. today – abuse of prescription pain medications. Through this initiative, families can actively address concerns with the responsible use of pain medications, patient safety and responsible drug disposal;
- Improving integration of federal and state prescription drug monitoring programs (PDMPs) and efforts; and strong advocacy from Mallinckrodt in support of a PDMP in Missouri, the lone U.S. state still without such a program;
- Enhancing addiction rehabilitation and drug take-back programs, including provision of drop boxes to local law enforcement in communities where major company sites reside;
- Collaborating with law enforcement to help prevent misuse and diversion, including:
- Providing no-cost placebo tablets of Mallinckrodt opioids to officers and prosecutors for use in law enforcement operations;
- Attacking drug theft through tracking devices in selected Mallinckrodt drug bottles;
- Contributing testimony on behalf of prosecution in drug diversion cases;
- Improving stakeholder education for patients, providers and the public at large, including education initiatives validated by measurable outcomes; and
- Partnering with stakeholders and strategically aligned third party organizations, in part through founding the Anti-Diversion Industry Working Group, a collective of leading manufacturers and distributors of pharmaceutical controlled substances coming together to collaborate and share best practices with the purpose of exceeding DEA obligations for opioid anti-diversion programs.
For additional information on Mallinckrodt’sresponsible use initiatives, visit www.mallinckrodt.com/corporate-responsibility/safe-use-initiatives.
