New York charges Mallinckrodt with insurance fraud related to opioids

spike

FILE PHOTO: A pharmacists holds prescription painkiller Oxycodone Hydrochloride, 30mg pills, made by Mallinckrodt at a local pharmacy, in Provo, Utah, U.S., April 25, 2017. REUTERS/George Frey

NEW YORK (Reuters) – New York state charged Mallinckrodt Plc (MNK.N) on Tuesday with insurance fraud for misrepresenting the safety and efficacy of its opioid drugs, leading to medically unnecessary prescriptions.

Governor Andrew Cuomo said the charges brought by the state’s Department of Financial Services are the first against a major opioid manufacturer in that regulator’s probe into entities that contributed toward the nationwide opioid crisis.

Mallinckrodt was accused of overstating the benefits of long-term opioid treatment, downplaying the risks of addiction and abuse, and knowing its conduct would result in the payment of insurance claims on unnecessary opioid prescriptions.

A spokesman for Mallinckrodt did not immediately respond to a request for comment. The company is headquartered in Staines-Upon-Thames in Britain, and has U.S. offices in Missouri and New Jersey.

Cuomo called Mallinckrodt “the most prolific manufacturer” of opioid pills in New York, supplying about 5 million policyholders with more than 1 billion pills from 2009 to 2019.

Mallinckrodt was charged with violating two New York insurance laws, each of which carries penalties of up to $5,000 per violation, Cuomo said.

In afternoon trading, Mallinckrodt shares were down 22 cents, or 6.3%, at $3.25.

Reporting by Jonathan Stempel in New York; Editing by Bernadette Baum

Source Article

Next Post

Recovering from this unprecedented oil crash could take years and may not benefit Saudi or Russian producers

In the course of my 36-year career, I’ve covered five crashes in the price of oil. In two cases OPEC, OPEC + or some group of oil producers flooded the markets with crude oil to gain competitive advantage over rival countries. In two other cases, financial market shocks crushed the […]