How did Acthar's price affect Medicaid?
By treating Acthar as a new drug first marketed in 2013, Questcor reset the rebate baseline to a price already above $28,000 — wiping out decades of prior increases — and paid $234.7 million to resolve the resulting Medicaid fraud allegations.
Under Medicaid's rebate rules, when a drug's price rises faster than inflation, the manufacturer must pay an extra rebate calculated from the drug's price when it first entered the market. The government alleged that from 2013, Questcor and then Mallinckrodt paid rebates as if Acthar were a new drug first marketed in 2013, erasing all prior price increases from the calculation, even though Acthar already cost over $28,000 per vial by then. The allegations covered January 2013 to June 2020. Mallinckrodt paid about $234.7 million to resolve the Medicaid claims and admitted Acthar was not a new drug as of 2013. It agreed to reset the rebate calculation so that state Medicaid programs receive 100% rebates on Acthar Medicaid sales based on current pricing.