Questcor Pharmaceuticals



QuestcorPharmaceuticals is a drug manufacturing company based in the UnitedStates. It makes drugs for treating humans suffering from deadly,inflammatory, and difficult-to-treat autoimmune diseases. The companyis committed on developing drugs for treating rheumatology,neurology, and nephrology because the fields have considerablemedical conditions that require effective regimen. The RiboGeneInc. andCyprosPharmaceutical Corporation mergedin 1999 to create QuestcorPharmaceuticals, Inc.Questcor Company operates on strict corporate business principlesthat that ensures it does not breach either the US &quotComplianceProgram Guidance for Pharmaceutical Manufacturers&quot or the“California Health and Safety Code sections 119400 and 119402”(MallinckrodtPharmaceuticals, Inc., 2014).

Theadministration for used in the company has many advantages. First,the company owners are not accountable to the debts or judgments thatdo not favor it. The shareholders are only responsible for theirstock investment in the company. As such, the company owners cannotbe arrested if the company defaults a debt given by another company.Nonetheless, individual employees are not immune from regular lawsand regulations. For example, an individual stockholder in thecompany can face prosecution if individual stakeholders lack personalresponsibility such as filing tax returns (MallinckrodtPharmaceuticals, Inc., 2014). Second, incorporations can raise extracapital through selling its stock. Questcor Company sold its stocksin 2008 through NASDAQ to raise extra capital. Third, the company canwithhold or deduct the cost of benefits it spends on its employees.Fourth, the company has flexible taxation plans. For instance, thestockholders can accomplish various requirements such that it wouldbe taxed like a partnership (Mallinckrodt plc, 2014). Fifth, thecompany cannot be dissolved if it is transferred to new ownersbecause an independent board of directors manages it. An electedboard, that is responsible for making financial, investment and otherkey decisions, runs the thus, the companyowners do not require participating in making key decisions androutine management requirements (, Inc.(QCOR) –Nasdaq., 2014).

Onthe other hand, the ’ business form hasdrawbacks such as requiring extensive paperwork for it to comply withthe industry regulations. Incorporations require compliance with somelocal, federal, and state agencies, hence the long formalities.Second, the procedure of incorporating an organization is costlierand more time-consuming than business forms such as a soleproprietorship. Lastly, the income generated from incorporations issubject to high taxation. The dividends allocated to the shareholdersis considered as business income, thereby it is taxed for the secondtime (Ornstein, 2014).

TheQuestcor Company has business operations in over forty countriesacross the globe. Previously, the company’s main manufacturingplant was located in the California, United States. However, theheadquarters of the company have shifted to Dublin, Ireland, thenerve center of the Mallinckrodt Company that is acquiring Questcorfor $5.6 billion. Previously, had licensedthird party companies that were distributing its drugs in variouscountries across the globe, but the merge with MallinckrodtPharmaceuticals will enhance its market penetration since the latterhas well-developed infrastructure in over seventy countries worldwide(Herper, 2014).

Themain opportunities of entering the globalmarket are that it will expand its market reach. Since it deals withspecialized medication, the sales returns will increase drasticallyas it will target that it had not third party distributors. Inaddition, the merge with Mallinckrodt Company is also advantageousbecause the organization has a well-developed infrastructure acrossthe globe (Herper, 2014). Second, the headquarters of QuestcorCompany will also be moved to Ireland as it has better taxationpolicies compared to the United States. Third, the company’s costof marketing will significantly reduce because the companies willconduct a shared marketing policy with Mallinckrodt Company (QuestcorPharmaceuticals, Inc. (QCOR) –Nasdaq., 2014).

QuestcorCompany has unique market advantages such as big and strong domesticmarket in the United States. The success of the Company in the UnitedStates provides with proprietary marketing techniques and referralmarket it will use in extending its business’ interest worldwide.Internationalization of the company will help it to reach new marketsthat will in turn increase its returns. The growth rate will alsoincrease since the company can reinvest its high returns in researchand development of its niche medication (MallinckrodtPharmaceuticals, Inc., 2014).

However,the company will face weaknesses such as high costs of entering intonew markets as it will have to establish an operation center, as wellas promote the medication. The procedures and cost of acquiring loansin another country may also be higher than in the United States.Besides, finding a reliable financier in a new country might provehard for the company. The company will also require investing inresearch of its products and the international market (Herper, 2014).Each potential market has unique characteristics thus, newbusinesses may require investing conducting research that would inturn promote its development. The organization will also face stiffcompetition from other established businesses in the new markets.Most of the new markets the company is targeting may have alternativecheaper drugs that may significantly increase the level ofcompetition of the business (Icon Group International, Inc. Staff,2000).

Accordingto the Questcor regional business manager in the United States,Matthew: “Thisis a place where your ideas and opinions not only matter, but areencouraged. Truly unique, like no other company you will work for, acompany with a very bright future (Mallinckrodtplc, 2014).”In 2011, Forbes ranked the company as the second best smallcompanies. The company offers excellent staff benefits to itsemployees such as medical benefits, paid holidays and time off,dental benefit, education assistance programs, flexible spendingaccounts, and the 401(k) plans among other offers (Herper, 2014).Employees suffering from private difficulties, such as maritalissues, can receive paid confidential services from the company’saffiliated associates. The company actively participates incharitable organizations and events. The “Independent MedicalEducation Grants” offer financial support to patients (Ornstein,2014). Similarly, “Charitable Contributions” offer financialsupport to organizations that give vast public benefit while“Research Fellowship Award Program” gives grants to bothnon-profit personnel and institutions that conduct research forfilling existing medical gaps respectively (Icon Group International,Inc. Staff, 2000).

Questcor’skey research program focuses on understanding melanocortin peptidesfunctions as an immune response and inflammation regulators. Thecompany then uses the knowledge in promoting its development programsof inventing melanocortin medication for inflammatory anddifficult-to-treat autoimmune. The company’s vision is to remainthe innate destination for enterprising and resourceful persons whoare not scared of exploring new treatment solutions. Questcor’sPharmaceutical’s vision is bringing determined persons together sothat they can improve and progress quality of medication productsthat assist in creating healthier nations (Pollack, 2012).

AlthoughQuestcor Company is a successful business, the management can stillimprove its productivity through sealing some critical loopholes. Forexample, since Mallinckrodt Pharmaceuticals acquired the company, thecost of H.P. Acthar Gel is expected to increase further. Manyhospitals, insurance companies, and independent companies are alreadycomplaining that the organization’s drugs are too costly for bothmiddle- and low-income earners. Presently, the gel costs over twentytimes higher than its price in 2008 (Mallinckrodt Pharmaceuticals,Inc., 2014). In 2012, H.P. Acthar Gel ranked at position 139 of themost expensive drugs Medicare and Medic programs offer. The suddendrug cost increase is evident considering that it ranked at position660 out of more than three thousand drugs the Medicare programpurchased for its patients. Insurance companies such asUnitedHealthcare, Aetna, and Cigna have restricted their clients fromaccessing the medication (Pollack, 2012). In addition, many doctorsare recommending cheaper alternative drugs to potential the patients.If the does not reduce the price of ActharGel, the company will lose their customers to the cheaper alternativebrands (Mallinckrodt plc, 2014).

Inaddition, Questcor Company should prepare tests and evidence to provethat Acthar Gel is effective in treating multiple diseases.Originally, the drug was intended to treat infantile spasms. However,it is presently promoted as an effective treatment for variousconditions such as rheumatic disorders, multiple sclerosis, andedematous state. The drug is supposedly an effective treatment fordermatologic, allergic states, serum sickness, ophthalmic, andrespiratory diseases. The sudden increase in the variety of diseasesand disorders that the drug can treat has been associated withunethical drug promotion (Mallinckrodt Pharmaceuticals, Inc., 2014).TheUnited States attorney’s office in Philadelphia isinvestigating the authenticity of the drug. According to the New YorkTimes’ daily, Andrew Pollack, the increased price of the companyhas attracted the scrutiny. A 5ml vial has increased from $40 in 1999to $28,000 in 2014 (Pollack, 2012). The reason for reducing the costof the drug is making it more affordable to several clients. Inaddition, several potential customers are already switching to usingalternative drugs that only cost a few dollars. On the other hand,the company will need to prove that the drug can heal the multipledisorders it is alleged to treat as a way to regain people’s trust(Mallinckrodt plc, 2014).

QuestcorPharmaceutical operates on Divisional organization structure. Thestaff members are classified into flexible and complete groups. Eachgroup has a designated function such as manufacturing the H.P. ActharGel while another accomplishes marketing tasks. Questcor is asubsidiary of Mallinckrodt Pharmaceuticals, but the companies hadbeen operating independently until recently. The staff members ofQuestcor Company are now under new management team, although theirresponsibilities have not changed (Mallinckrodt plc, 2014).

QuestcorCompany encourages leadership and innovation for its employeesthrough offering education assistance programs and grants topotential researchers. Every year, the company donates hundreds ofthousands to researchers developing treatment plans that can havewide benefits to the customers (Ornstein, 2014). Through thecompany’s “charitable giving program”, it finances companiesthat improve community wellness services and healthcare, enhanceseconomic development, and enhances Science, Technology, Engineering,Mathematics (STEM) learning in schools. The grant program targetspeople from all the locations the company operates (MallinckrodtPharmaceuticals, Inc., 2014). Eligible applicants of the grantprogram do not have to be employees of the company as long as theyare involved in the development of healthcare services that wouldbenefit the public. Since the establishment of QuestcorPharmaceuticals in 1999, the leadership and innovation of theemployees is evident from the extensive innovation the company. H.PActhar was intended to treat infant infantile spasms, but extensiveresearch discovered that it could treat a large number of chronicdiseases (Mallinckrodt plc, 2014).


Herper,M. (2014). $5.6Billion Questcor Deal Means High Drug Prices For Everybody.Forbes.

Pollack,A. (2012, December 30). Questcor Finds Profits, at $28,000 a Vial.NewYork Times,pp. BU1.

Ornstein,C. (2014, August 5). The Obscure Drug With a Growing Medicare Tab.NewYork Times,Pp. A3.

IconGroup International, Inc. Staff (2000). QuestcorPharmaceuticals, Inc.: Labor Productivity Benchmarks andInternational Gap Analysis.Icon Group International, Incorporated, 0597469210, 9780597469213

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