Mayor Larry Morrissey of Rockford, Illinois. Screenshot, 23WIFR Rockford, Illinois, is suing Mallinckrodt Pharmaceuticals over the price of one of the company's blockbuster drugs, Acthar.

Rockford is accusing Mallinckrodt of taking advantage of its hold on the market and charging an exorbitant price for the drug — which is listed at about $35,000 for a vial.



The drug cost $40 a vial as recently as 2001, but the price was raised by its previous owner, which Mallinckrodt acquired, and then again by Mallinckrodt.

In 2015 the town paid almost $500,000 for just nine prescriptions of the drug to treat two children, according to the complaint. The gross, per-vial cost of the medication was $54,339.76.

"By engaging in the antitrust conduct and other unlawful conduct described herein, the Defendants have been knowingly enriched by the amount charged for Acthar over and above what they could have charged in a competitive market, and what was charged previously before the unlawful conduct was undertaken," the complaint said.

"By establishing and maintain a monopoly, exercising monopoly power, and engaging in other unlawful acts and practices, the Defendants were able to extract exorbitant revenue from consumers that had nowhere else to turn for treatment."

The city is accusing Mallinckrodt of violating antitrust laws and the Illinois Consumer Fraud and Deceptive Practices Act. The lawsuit also names United BioSource (UBC), a subsidiary of the nation's largest pharmacy benefit manager, Express Scripts as a defendant. It alleges that UBC and another Express Scripts subsidiary, CuraScripts, colluded with Mallinckrodt to maintain its monopoly.

"Mallinckrodt is aware of the lawsuit filed in the US District Court for the Northern District of Illinois," a company representative told Business Insider. "The company has received and is evaluating the complaint, and will consider its response after completing its assessment."

Details of the lawsuit were first reported by the Rockford-based television station WIFR.

One of the worst offenders

The station broadcast comments from the mayor of Rockford, in which he called Mallinckrodt "one of the worst offenders," citing "unconscionable price increases."

Mallinckrodt acquired Acthar in 2014 when it bought another pharmaceutical firm, Questcor. In January, Mallinckrodt paid $100 million to settle claims with the Federal Trade Commission and five states that Questcor had purchased a competitor to the drug to stifle competition. The company did not admit wrongdoing.

Rockford's complaint, however, attributes a monopoly by Mallinckrodt, in part, to what happened with the other drug, called Synacthen.

Business Insider "Such conduct reasonably contributed to Mallinckrodt's maintenance of monopoly power," it says. "The purpose and effect of such conduct has been to suppress rather than promote competition on the merits."

Acthar isn't just controversial for its price. Even though the drug is primarily used to treat infantile spasms, and is prescribed by less than 1% of doctors in the US, it has become one of the 20 most costly drugs for Medicare Part D, a government prescription drug program for the elderly.

The drug cost the program about half a billion dollars in 2015.

Acthar can be used to treat 19 ailments, including multiple sclerosis, though many insurers restrict its use for anything other than infantile spasms.

Doctors have also questioned the drug's efficacy overall, in part because it has never undergone clinical trials. The Rockford complaint also questions whether the drug is as efficacious as its marketing suggests.

Read the entire complaint below: