Mallinckrodt settles U.S. opioid drug probe for $35 million

[July 12, 2017] By Nate Raymond

(Reuters) - Mallinckrodt Plc, one of the largest manufacturers of the generic opioid painkiller oxycodone, will pay $35 million to resolve allegations that it failed to report suspicious drug orders, the U.S. Justice Department said on Tuesday.

The deal, in which Mallinckrodt did not admit wrongdoing, marked a record settlement of claims that a drugmaker failed to properly notify the U.S. Drug Enforcement Administration of suspicious orders for drugs such as oxycodone, the Justice Department said.

U.S. Attorney General Jeff Sessions said the settlement will send a message to other drugmakers that the Justice Department will seek to hold them accountable for their actions amid a national opioid addiction epidemic.

"Mallinckrodt's actions and omissions formed a link in the chain of supply that resulted in millions of oxycodone pills being sold on the street," he said in a statement.

"I believe that will prevent drug abuse, prevent new addictions from starting and ultimately save lives."

Mallinckrodt previously announced an agreement-in-principle to resolve the investigations in April. The company said it continues to deny the allegations.

Michael-Bryant Hicks, Mallinckrodt's general counsel, said the company chose to settle "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."

Opioids, including prescription painkillers and heroin, killed more than 33,000 people in the United States in 2015, more than any year on record, according to the U.S. Centers for Disease Control and Prevention.

According to the Justice Department, from 2008 to 2011, Mallinckrodt supplied distributors increasingly excessive amounts of oxycodone pills without notifying the DEA of the suspicious orders.

Those distributors in turn supplied the drugs to various U.S. pharmacies and pain clinics, the Justice Department said.

In addition to the monetary penalty, Mallinckrodt agreed to analyze data on orders from customers down the supply chain to identify suspicious sales, the Justice Department said.

Mallinckrodt's stock price closed at $43.05, up 2.84 percent, on the New York Stock Exchange.

(Reporting by Nate Raymond in Boston; Editing by Lisa Shumaker and Bill Trott)

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