Governor Cuomo announced Tuesday that the New York State Department of Financial Services has began administrative proceedings and filed chargesagainst Mallinckrodt plc and its subsidiaries, Mallinckrodt LLC and SpecGX LLC.
These charges are the first to be filed in DFS' ongoing investigation into the entities that created and perpetuated the opioid crisis.
According to DFS' Statement of Charges, Mallinckrodt was the most prolific manufacturer of opioid pills in the New York market, producing approximately 39 percent of the opioid pills that flooded New York from 2006 to 2014.
From 2009 to 2019, Mallinckrodt supplied New York policyholders of commercial health insurance — a population that included approximately five million New Yorkers — with more than one billion opioid pills.
DFS Statement of Charges alleges that Mallinckrodt:
- Misrepresented the safety and efficacy to convince healthcare professionals and patients that the benefits of using opioids to treat chronic pain outweighed the risks
- Repeatedly overstated the benefits of long-term opioid treatment and failed to disclose the lack of evidence supporting such use
- Downplayed the risks of negative outcomes for patients, including the risk of addiction and abuse
- Knew the false narrative and misrepresentations would result in claims for payment of medically unnecessary opioid prescriptions to commercial insurance companies
DFS alleges that Mallinckrodt made misrepresentations in a vast array of materials and by various means, including in the labeling and marketing of its branded opioids. The charges allege that Mallinckrodt knew that the statements it was presenting as proven scientific facts were in fact fraudulent with no scientific basis.
According to DFS' Statement of Charges, Mallinckrodt violated two New York Insurance Laws that prohibit fraudulent insurance acts and carries with it penalties of up to $5,000 plus the amount of the fraudulent claim for each violation;
DFS alleges that each fraudulent prescription constitutes a separate violation.
"The worst frauds are those that go beyond individual harm to institutionalized systemic fraud - and the opioid scheme is no exception," said Governor Cuomo.
