http://www.businessinsider.com/mallinckrodt-acthar-express-scripts-call-by-wells-fargo-2017-6

• Mallinckrodt Pharmaceuticals is facing scrutiny over the price of its blockbuster drug Acthar, some say it wouldn’t be viable without an opaque distribution system.
• The company depends on pharmacy-benefit manager (PBM) Express Scripts to distribute the drug, manage co-pays, and provide patients with assistance paying for it.
• The role of PBMs is under scrutiny from Congress, they fear PBMs pushes prices up, and that could threaten Mallinckrodt’s Achtar franchise.

Earlier this month, Wells Fargo pharma analyst David Maris called a Wall Street huddle.

He held a call for embattled pharmaceutical firm Mallinckrodt, giving its CEO Mark Trudeau an opportunity to explain the uproar surrounding his company’s $36,382 blockbuster drug, Acthar.

You see, a very Wall Street thing has just happened to Acthar. Short sellers are circling, and people are now asking questions about what was once considered business as usual. For months, some in the market, like Citron Research’s Andrew Left, have been daring Mallinckrodt to test Acthar’s efficacy as a treatment for multiple sclerosis. They say it doesn’t work.

Worse yet, other short sellers say they think they know how Acthar gets away with not working. At a Las Vegas hedge fund conference in May, Jim Chanos accused the company of having a “murky alliance” with pharmacy benefits manager Express Scripts.

“This alliance may lead to performance-enhancing drug prices,” Chanos said, “but it could give investors the blues.”

Why? Because lawmakers are starting to realize that drug pricing and distribution is a black box. What happens to the price of a drug from the time it is made to the time it gets to a patient — who gets paid and how much — is something of a mystery. It’s something, it seems, the pharmaceutical industry would rather not share.

Maris’ Wall Street huddle call opened that black box just a crack, and what it revealed is just the tip of everything Washington is worried about.