Georgia city sues alleging 'unconscionable' drug cost

ATLANTA (AP) — A Georgia city is suing a pharmaceutical company over a medication it says went from $40 to over $39,000 for a single vial, costing local taxpayers more than $2 million to cover one patient.

Mallinckrodt ARD LLC broke the law to keep the price of the drug Acthar artificially high, the city of Marietta said in a lawsuit filed Thursday in federal court in Atlanta.

The city has a self-funded health plan. A family member of one of the plan's beneficiaries requires Acthar, and the city covers the cost, according to the suit. The drug is used to treat a seizure disorder in babies and acute relapses of multiple sclerosis in adults, among other conditions.

A media representative for Mallinckrodt, Daniel Yunger, said he would reach out to the company for comment.

The lawsuit calls the drug's price “exorbitant” and “unconscionable” and accuses Mallinckrodt of stifling competition that could have brought the price down. It also cites a lawsuit filed last year by the U.S. Department of Justice that accuses the company of illegal kickbacks for Acthar.

The company has said it was following federal guidelines.