STAINES-UPON-THAMES, United
Kingdom, June 15, 2020
/PRNewswire/ -- Mallinckrodt plc (NYSE: MNK), a global
biopharmaceutical company, announced its disappointment with the
U.S. Court of Appeals for the District of
Columbia decision to deny its request for a temporary
injunction preventing the U.S. Centers for Medicare and
Medicaid Services (CMS) from enforcing a change in Medicaid drug
rebate calculation for Acthar® Gel (repository
corticotropin injection). Mallinckrodt
had asked for the temporary injunction as it appeals a lower court
ruling that allowed CMS to reset the base date average manufacturer
price (AMP). The Appeals Court also ordered an expedited
briefing and oral argument schedule that will likely lead to fall
oral arguments, and potentially a ruling by end of year.
As a result of today's appeals court ruling, Mallinckrodt will change the base date AMP for
Acthar Gel, as directed by CMS. The effect of the change is
an immediate recognition of retroactive non-recurring charges
(estimated at approximately $650
million through mid-June) and the prospective loss of Acthar
Medicaid net sales, which has historically contributed to Acthar
Gel net sales of $90 to $100 million annually. The company will continue
to appeal the March 16 ruling by the
U.S. District Court for the District of
Columbia that upheld CMS' position. Barring other
arrangements, the cash payments for retroactive Medicaid rebate
charges will be processed over time, in accordance with the normal
rebate payment schedule, and the company expects the cash outlays
will most likely commence in the fourth quarter of 2020.
Despite the ruling, Mallinckrodt
remains committed to ensuring that Medicaid patients have access to
Acthar Gel.
"We are disappointed in the appeals court decision not to issue
a temporary injunction to prevent CMS from enforcing this change in
Medicaid rebate calculations while our case is still under appeal,"
said Mark Casey, Executive Vice
President and Chief Legal Officer of Mallinckrodt. "We will continue our appeal,
which could be decided as early as end of year, and strongly
believe that the District Court misinterpreted the statute that
governs the Medicaid drug rebate program and failed to hold CMS
accountable to the Administrative Procedure Act. CMS twice
confirmed in writing its approval of the Acthar Gel Medicaid rebate
calculation in use today, before it later reversed its position
without giving fair notice or any clear legal basis for doing so."
In legal filings requesting the temporary injunction,
Mallinckrodt warned that the
retroactive non-recurring charges – if allowed to stand by the
appeals court – "would have a dramatic impact upon the company's
existing financial obligations and its efforts to settle other
litigation." While Mallinckrodt has reached an agreement in
principle on a global settlement of opioids litigation, and
continues to work collaboratively with the parties involved to
expedite a reasonable resolution, the agreement could be in
jeopardy if the appeals court upholds CMS' position. The company
continues to explore all options to address its long-term
liabilities and risks.
ABOUT MALLINCKRODT
Mallinckrodt ARD LLC is a
subsidiary of Mallinckrodt, a global
business consisting of multiple wholly owned subsidiaries that
develop, manufacture, market and distribute specialty
pharmaceutical products and therapies. The company's Specialty
Brands reportable segment's areas of focus include autoimmune and
rare diseases in specialty areas like neurology, rheumatology,
nephrology, pulmonology and ophthalmology; immunotherapy and
neonatal respiratory critical care therapies; analgesics and
gastrointestinal products. Its Specialty Generics reportable
segment includes specialty generic drugs and active pharmaceutical
ingredients.
Mallinckrodt Pharmaceuticals uses its website as a channel of
distribution of important company information, such as press
releases, investor presentations and other financial information.
It also uses its website to expedite public access to time-critical
information regarding the company in advance of or in lieu of
distributing a press release or a filing with the U.S. Securities
and Exchange Commission disclosing the same information. Therefore,
investors should look to the Investor Relations page of the website
for important and time-critical information. Visitors to the
website can also register to receive automatic e-mail and other
notifications alerting them when new information is made available
on the Investor Relations page of the website.
CAUTIONARY STATEMENTS RELATED TO FORWARD-LOOKING
STATEMENTS
Statements in this document that are not strictly
historical, including statements concerning the dispute between
Mallinckrodt, HHS and CMS with regard
to Medicaid drug rebates for Acthar Gel; the litigation filed by
Mallinckrodt against HHS and CMS in
connection with this dispute including any related appeals; the
change of the base date AMP for Acthar Gel and the resulting
payment of any retroactive non-recurring charges; the impact of
such dispute and any such litigation on Mallinckrodt's ability to fund research and
development activities (including COVID-19 related activities) or
on its ability to effectuate its proposed opioid settlement; the
impact of any of the foregoing on Mallinckrodt's future financial condition,
operating results, and other pending litigation; and any other
statements regarding events or developments that Mallinckrodt believes or anticipates will or may
occur in the future, may be "forward-looking" statements within the
meaning of the Private Securities Litigation Reform Act of 1995,
and involve a number of risks and uncertainties.
There are a number of important factors that could cause actual
events to differ materially from those suggested or indicated by
such forward-looking statements and you should not place undue
reliance on any such forward-looking statements. These factors
include risks and uncertainties related to, among other things: the
dispute between Mallinckrodt, HHS and
CMS, including the outcome of the lawsuit filed by Mallinckrodt and any related appeals, as well as
the time and expense of litigating this dispute; the impact of this
dispute on Mallinckrodt's expectations
for performance in 2020, as well as the potential retroactive
financial impact on Mallinckrodt of an
adverse outcome or any other impacts; governmental investigations
and inquiries, regulatory actions and lawsuits brought against
Mallinckrodt by government agencies and
private parties with respect to its historical commercialization of
opioids, including the non-binding agreement in principle regarding
terms and conditions of a global settlement to resolve all current
and future opioid-related claims; scrutiny from governments,
legislative bodies and enforcement agencies related to sales,
marketing and pricing practices; pricing pressure on certain of
Mallinckrodt's products due to legal
changes or changes in insurers' reimbursement practices resulting
from recent increased public scrutiny of healthcare and
pharmaceutical costs; the reimbursement practices of governmental
health administration authorities, private health coverage insurers
and other third-party payers; complex reporting and payment
obligations under the Medicare and Medicaid rebate programs and
other governmental purchasing and rebate programs; cost containment
efforts of customers, purchasing groups, third-party payers and
governmental organizations; changes in or failure to comply with
relevant laws and regulations; Mallinckrodt's and its partners' ability to
successfully develop or commercialize new products or expand
commercial opportunities; Mallinckrodt's ability to navigate price
fluctuations; competition; Mallinckrodt's and its partners' ability to protect
intellectual property rights; limited clinical trial data for
Acthar Gel; clinical studies and related regulatory processes;
product liability losses and other litigation liability; material
health, safety and environmental liabilities; potential
indemnification liabilities to Covidien pursuant to the separation
and distribution agreement; business development activities;
retention of key personnel; the effectiveness of information
technology infrastructure including cybersecurity and data leakage
risks; customer concentration; Mallinckrodt's reliance on certain individual
products that are material to its financial performance;
Mallinckrodt's ability to receive
procurement and production quotas granted by the U.S. Drug
Enforcement Administration; complex manufacturing processes;
conducting business internationally; Mallinckrodt's ability to achieve expected benefits
from restructuring activities; Mallinckrodt's significant levels of intangible
assets and related impairment testing; labor and employment laws
and regulations; natural disasters or other catastrophic events;
Mallinckrodt's substantial indebtedness
and its ability to generate sufficient cash to reduce its
indebtedness; future changes to U.S. and foreign tax laws or the
impact of disputes with governmental tax authorities; the impact of
Irish laws; and the impact of the outbreak of the COVID-19
coronavirus.
These and other factors are identified and described in more
detail in the "Risk Factors" section of Mallinckrodt's Annual Report on Form 10-K for the
fiscal year ended December 27, 2019
and the "Risk Factors" section of Mallinckrodt's Quarterly Report on Form 10-Q for
the quarterly period ended March 27,
2020. The forward-looking statements made herein speak only
as of the date hereof and Mallinckrodt
does not assume any obligation to update or revise any
forward-looking statement, whether as a result of new information,
future events and developments or otherwise, except as required by
law.
CONTACTS
Investor Relations
Daniel J. Speciale, CPA
Vice President, Investor Relations and IRO
314-654-3638
daniel.speciale@mnk.com
Media Inquiries
Ron Bartlett
H+K Strategies
Senior Vice President
813-545-2399
ron.bartlett@hkstrategies.com
Government Affairs
Mark Tyndall
Senior Vice President, Government Affairs
& Chief Counsel, Litigation
202-383-0090
mark.tyndall@mnk.com
Mallinckrodt, the "M" brand mark and
the Mallinckrodt Pharmaceuticals logo are trademarks of a
Mallinckrodt company. Other brands are
trademarks of a Mallinckrodt company or
their respective owners. © 2020 Mallinckrodt. 06/20
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