September 12, 2017
Mallinckrodt's mission is to provide safe, effective treatments that improve the lives of patients. Our employees live this mission every day. Ongoing media reports, publications and public comments by acknowledged critics simply repeat previously published misstatements of facts and unsupported allegations.
Repeated assertions of these themes and claims do not make them true.
An analysis published in JAMA Internal Medicine claims that there is little to no evidence that H.P. Acthar Gel® works in treatment of multiple sclerosis (MS) exacerbations and that other less costly alternatives (high dose corticosteroids) aren't being prescribed – increasing costs to the entire healthcare system and Medicare in particular.
FACT: H.P. Acthar Gel (repository corticotropin injection) is U.S. Food and Drug Administration (FDA)-approved for treatment of acute exacerbations (or relapses) of multiple sclerosis (MS) in adults. H.P. Acthar Gel is not a form of corticosteroid. It is a complex organic formulation containing a peptide chain long known to stimulate natural steroid production from a patient's own adrenal gland. Though steroids are commonly used as a first line treatment of MS relapse, data from the North American Research Committee on Multiple Sclerosis indicates 30% of MS relapse patients had no response to steroids. Additionally, some patients cannot tolerate steroids. Because of these factors, H.P. Acthar Gel can provide an important treatment option for patients who need an alternative therapy.
FACT: More than 50 years of clinical experience support the effectiveness of H.P. Acthar Gel in treatment of appropriate patients. Since acquiring the product in 2014, Mallinckrodt has initiated a number of new randomized clinical trials (link) on the drug (including a double-blind, randomized placebo controlled MS relapse trial and a MS relapse registry) as well as providing ongoing support for investigator sponsored trials (link) and health economic and outcomes research. Additionally, the FDA updated Acthar's label in 2010, after determining there was sufficient scientific and clinical evidence to support the 19 indications now in the current label. H.P. Acthar Gel makes a significant difference in the lives of thousands of very sick patients with high unmet medical needs. Furthermore, as to pricing, Mallinckrodt has made a public pledge to price its products responsibly (link), and in a way that reflects the value they offer patients, providers and the U.S. healthcare system as a whole.
Claims were repeated that Mallinckrodt and Express Scripts have an inappropriate relationship
FACT: There is no inappropriate relationship between Mallinckrodt and Express Scripts. Mallinckrodt has long engaged – and has appropriate contracts with – the majority of the largest Pharmacy Benefit Managers in the U.S. including Express Scripts. Furthermore, we engage with a variety of partners in all parts of the industry value chain to ensure access for appropriate patients who are prescribed H.P. Acthar Gel.
The erroneous claim was repeated that H.P. Acthar Gel contributes or represents the "vast majority" of Mallinckrodt's annual revenue and profitability – falsely supported by claims made in a lawsuit by a former employee alleging that the company had misrepresented the contribution of the drug to its overall results.
FACT: Though H.P. Acthar Gel makes a substantial contribution to Mallinckrodt's overall profitability, many people mistakenly underestimate the significant contributions of the rest of the company's diversified portfolio. While Mallinckrodt does not publicly disclose the profitability of any individual product, revenues for its portfolio of hospital products alone were approximately equal to those for H.P. Acthar Gel in fiscal 2016 as were revenue contributions from the company's specialty generics segment.
FACT: A "tag-along" lawsuit (referenced above) has been filed involving many of the same allegations as a consolidated class action security litigation filed against Mallinckrodt and certain company officers in January 2017. This recent lawsuit was brought by a single former employee who claims to represent participants in the company's employee stock purchase plan. Mallinckrodt believes the claims in these lawsuits are baseless will defend itself vigorously. The company's officers take their fiduciary responsibilities very seriously.
As I said in in the opening of this letter, Mallinckrodt's mission is to provide safe, effective treatments like H.P. Acthar Gel that make a difference in the lives of patients every day. When we are challenged by critics distorting facts and making unfounded claims, we will continue to support and defend our medicines and our company with the truth.
Hugh M. O'Neill
Executive Vice President and President, Autoimmune and Rare Diseases
About H.P. Acthar Gel (repository corticotropin injection)
H.P. Acthar Gel is an injectable drug approved by the FDA for the treatment of 19 indications. Of these, today the majority of Acthar use is in these indications:
IMPORTANT SAFETY INFORMATION
Warnings and Precautions
Mallinckrodt is a global business that develops, manufactures, markets and distributes specialty pharmaceutical products and therapies. Areas of focus include autoimmune and rare diseases in specialty areas like neurology, rheumatology, nephrology, pulmonology and ophthalmology; immunotherapy and neonatal respiratory critical care therapies; and analgesics and hemostasis products. The company's core strengths include the acquisition and management of highly regulated raw materials and specialized chemistry, formulation and manufacturing capabilities. The company's Specialty Brands segment includes branded medicines and its Specialty Generics segment includes specialty generic drugs, active pharmaceutical ingredients and external manufacturing. To learn more about Mallinckrodt, visit www.mallinckrodt.com.
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Coleman N. Lannum, CFA
Senior Vice President, Investor Strategy and IRO
Daniel J. Speciale, CPA
Director, Investor Relations
Senior Communications Manager
Chief Public Affairs Officer
Vice President, Government Affairs, Public Policy and Advocacy