The U.S. Securities and Exchange Commission said that Mallinckrodt failed to tell investors it had potentially overcharged Medicaid for its flagship drug, but the regulator waived a $40 million civil penalty partly because the pharmaceutical company agreed to hire a compliance consultant, the Wall Street Journal reported. The SEC said in an administrative proceeding Thursday that the Centers for Medicare and Medicaid Services informed Mallinckrodt as early as 2016 that the company was using an incorrect rebate rate for its sales of Acthar Gel, a drug used to treat several rare autoimmune diseases, which meant it was overcharging state Medicaid programs for the drug. Mallinckrodt, which didn’t admit or deny the SEC’s findings, agreed to hire a compliance consultant to conduct a comprehensive review of the company’s disclosure and internal accounting controls, as well as implement the consultant’s recommendations. The SEC said that it wouldn’t impose the $40 million penalty because of Mallinckrodt’s financial position and because it had committed to retain a consultant. The company in November announced it had completed its financial restructuring and emerged from chapter 11 bankruptcy.
