OKLAHOMA CITY (KFOR) – Oklahoma has joined the 49 other states to settle allegations of fraud against a U.S. subsidiary of an Irish pharmaceutical company.

Oklahoma Attorney General John O’Connor announced that Oklahoma has joined with 49 other states, Washington, D.C., Puerto Rico, and the federal government to settle allegations of fraud against Mallinckrodt ARD, LLC.

The total value of the settlement is $233,707,865.18, plus interest, to be paid over seven years.

In all, Oklahoma will receive $3,830,808.75.

“My office will always investigate those who defraud our state’s healthcare and Medicaid system,” said Attorney General O’Connor. “I applaud our Medicaid Fraud Control Unit for always pursuing those who attempt to jeopardize the health and well-being of Oklahomans.”

According to allegations, Mallinckrodt knowingly underpaid Medicaid rebates due for its drug H.P. Acthar Gel from January 2013 through June 30, 2020.

The government alleges that Mallinckrodt’s conduct violated the Federal False Claims Act and the Oklahoma Medicaid False Claims Act, which resulted in the submission of false claims to the Oklahoma Medicaid program.

Under the Medicaid Drug Rebate Program, when a manufacturer increases the price of a drug faster than the rate of inflation, it must pay the Medicaid program a per-unit rebate of the difference between the drug’s current price and the price of the drug if its price had gone up at the general rate of inflation since 1990 or the year the drug first came to market, whichever is later.

The government alleges that Mallinckrodt and its predecessor began paying rebates for Acthar in 2013 as if Acthar was a “new drug” just approved by the FDA. It actually was first released in 1952.

Under the settlement, Mallinckrodt admitted that Acthar was not a new drug and would correct the base date.