Finance: One of the most hated drug companies on Wall Street is facing another nasty probe
Senator Claire McCaskill has some questions about the price of Mallinckrodt's pain drug, Ofirmev.
Senator Claire McCaskill (D-MO) has sent a letter to Mallinckrodt Pharmaceuticals, asking the company for details about the pricing of its pain medication, Ofirmev.
Ofirmev can be used as a safer alternative to opioids, and Mallinckrodt acquired the drug in 2014 when it purchased Cadence Pharmaceuticals for $1.4 billion.
Almost immediately after the sale, Mallinckrodt doubled the price of Ofirmev to 1,019.52 for a pack of 24 vials.
This is costing hospitals a fortune, so some of them are using cheaper more dangerous painkillers — highly addictive opioids. So, Senator McCaskill, who is also investigating a number of opioid manufacturers, is looking into the impact Ofirmev's price increase has had on "hospital decision making."
Mallinckrodt has yet to respond to our request for comment.
He's not the first on Wall Street to make that point either. Andrew Left of Citron Research has been challenging the company to test Acthar, which is primarily used to treat infantile spasms.
What makes Acthar so strange, is that most of its revenue comes from Medicare, which is a program for the elderly — a point that hasn't escaped the short selling community. We should also note that former Turing CEO Martin Shkreli, a man who became public enemy number one after jacking up the price of a life-saving AIDs treatment, also took issue with Mallinckrodt.
Currently, the Department of Justice, the SEC and other US attorneys are all investigating the company.
So you can see why the last thing the company needs is Senator McCaskill asking for documents.
You can read her full letter below.