Valeant Pharmaceuticals Intl Inc VRX 8.59%‘s 50 percent plunge on Tuesday is also sparking a selloff in another drug company that Citron’s Andrew Left says is the “poster child” for price gouging: Mallinckrodt PLC MNK 2.41%.
Mallinckrodt owns two different drugs, Acthar and Synacthen, used for the treatment of seizures in babies. According to Left, the drugs have a history of suspicious pricing changes, and they have never been directly compared to each other for differences in efficacy.
“Mallinckrodt is squeaking by without anyone talking about it. Mallinckrodt makes Valeant look like a bunch of choirboys,” Left told Real Money on Tuesday.
Mallinckrodt acquired Acthar via a buyout of Questcor in 2014.
Back in 2007, the price of Acthar jumped from $1,650/vial to $23,000/vial. Today a vial costs more than $30,000. In November 2015, the price of Synacthen in Canada jumped from $33.05/vial to $680/vial.
Left notes that the official explanation from Mallinckrodt for the jump in Synacthen’s price is that the company had been losing money on the drug and was forced to choose between a price hike and removing the drug from the market. Questcor gave a similar explanation for the leap in Acthar’s price back in 2007.
Left also questions the fact that the extremely expensive Acthar has never been tested against its relatively cheap alternative, Synacthen. He concluded…
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