For Immediate Release – June 26, 2017

  • Citron Explains the Company’s Admission on Acthar’s Adverse Events: Time to Call Your Lawyer

  • ADVERSE EVENTS on ACTHAR UP MORE THAN 280% Including Increase in Deaths

  • Not only will Mallinckrodt Go to 0, but This Report Publishes the Reason their Management might go to Jail


As if last month’s comments from Express Scripts were not bad enough for Mallinckrodt … The FDA has just disclosed information that could lead to criminal prosecution of Mallinckrodt executives. Three weeks ago, Express Scripts, the PBM whose subsidiaries are responsible for executing the entire delivery chain for Mallinckrodt’s Acthar, made a group of damning statements: that Acthar was an old drug, grossly overpriced, with very limited patient need, and was being used for label indications for which there was no clinical evidence.


This week the FDA released the updated Adverse Event database (FAERS) with complete 2016 data.

Citron has spent a week extracting the files and created a database for analysis. This is the first time this information is public. This new data reports sharply increasing numbers of deaths and hospitalizations associated with use of Acthar which are unprecedented over its history. During the periods covered, Acthar is showing single digit increases in unit volumes, while Adverse Events are being posted in excess 277% CAGR for the period 2012 through 2016.

Link to the FDA’s FAERS Database

Questions and Answers on FDA’s Adverse Event Reporting System (FAERS)

These statistics are startling, considering Pulitzer Prize winning journalist Gretchen Morgenson first introduced Wall Street to the negative FAERS data on Acthar in 2014 – long before the major jump in adverse events.

Why this could now become a Criminal Matter

Citron believes the reason for the increase in adverse events is the company’s aggressive expansion of Acthar into new indications, where it has not conducted clinical trials in order to prove its safety for those conditions. This explanation is not just idle speculation. A recent Qui Tam Lawsuit, filed by Barry Franks, former sales manager of Auto-Immune and Rare Disease Division of Mallinckrodt. The following statements are excerpts from the lawsuit, and point directly to the cause behind the increase in deaths and hospitalizations. Franks, a seasoned and experienced pharma sales professional, was expected to deliver sales results that were not supported by lawful drug sales practices. These excerpts from the full suit provide investors a chilling picture of how the company’s policies directed sales reps to push Acthar beyond its label conditions.

33. “However, the reason for the “explosive growth” of other Rheumatology sales teams at that point in time was due, in part, to MALLINCKRODT requesting that its representative promote the Acthar drug in an illegal, off-label manner.”

35. “Franks was clear that he would not engage in illegal activities to increase sales”… Despite this, and being advised that employees were told by compliance to not to “put anything in writing” …

37. “A similar push and acknowledgement that to keep his job, Franks essentially had to push in off-label areas…”

40. “Franks is informed and believes that there were illegal sales practices being committed in other regions…”

42. Franks was also aware of other compliance related issues at MALLINCKRODT, which Franks is informed and believes and thereon alleges that these issues include but are not limited to: potentially insurance/Medicare fraud related to the refills as noted above, HIPAA violations where four or eight week prescriptions were provided where there was no patient visit … This was done to “game the system” and potentially commit insurance/Medicare fraud.)

Here’s the full suit complaint. Citron strongly recommends all investors read it for yourself: Download Report

A Note to Mallinckrodt:

Before you respond:

These are not the statistics of some short seller or journalist who you dispute in Press Releases. This is not even the opinion of your PBM. This is the FDA. This is not the time to issue some nonsense PR, this is the time to call your lawyers. Remember, the FAERS database is voluntary — it might actually understate the harm you are doing to your off-label patients. Note: Remember Mallinckrodt claims it does not definitively know the active ingredient of this expensive and potentially dangerous drug. As stated on their own website:

Note: Remember Mallinckrodt claims it does not definitively know the active ingredient of this expensive and potentially dangerous drug. As stated on their own website:

“While the exact way that Acthar works in the body is unknown, further studies are being conducted.”

So while they have taken billions of dollars from Medicare… they do not even have a scientific grasp on the safety profile, let alone efficacy, while they knowingly HARM patients who as their sales team pushes the medication beyond the core indications.

How have they done this? Through unscrupulous doctors!

As Mallinckrodt has become more and more aggressive expanding marketing into untested indications, these are the type of doctors that have become associated with Acthar.

According to the FDA, the TOP #1 prescriber of Acthar was Dr. David Mandel.

Dr. Mandel was charged criminally with importing misbranded drugs by the DOJ

Worse, read here that top prescriber Dr. Sean Orr was misdiagnosing people with Multiple Sclerosis just so he could prescribe Acthar.

A Note to Mallinckrodt:

Please Do not respond with your standard line that:

“HP Acthar Gel makes a significant difference in the lives of thousands of very sick patients” and is ‘responsibly priced”

Then why did the nation’s most pre-eminent formulary manager just state the exact opposite?

The Future of Acthar: Imprimis

Enter Imprimis, who, through its spinoff Eton Pharmaceuticals, just announced it will be launching a competitor to Acthar, while enlisting the former CEO of Questcor to join its Board of Directors and advise on its’ launch of an Acthar competitor.

Eton plans on charging 40% less for its product than Mallinckrodt’s price.

When Imprimis did this to Mylan and the EpiPen, Mylan immediately created a generic version at half the price of the branded EpiPen. Imprimis executed a similar strategy with Turing Pharma, through the launch of a generic costing 1/750th of Turing’s price, immediately forcing Turing to reduce its drug’s price.

Lower priced alternatives to Acthar will enable patients to be treated with a product that has a direct filed safety profile with the FDA, and will create a disincentive for bad medicine to be practiced for the sake of greed.

More importantly, by being able to focus on people who can really benefit by Acthar and not be forced by the burden of a multi billion debt load, Eton will be able to penetrate and dominate the only market that Acthar Gel has a place in and not further hurt its patient base.


The most expensive drug on the Medicare dashboard is:

  • Untested,
  • Over Prescribed
  • Inferior to Competition
  • … and now Dangerous

The FDA has told you, their former employees have told you, and we now wait for the Department of Justice.

It is time for Congress or Express Scripts to act responsibly and stop this billion dollar charade before more people are hurt.

Cautious Investing to All