Mallinckrodt announced yesterday that it is suing the Centers for Medicare & Medicaid Services and the Department of Health and Human Services for changing the way Medicaid rebates are calculated for its pricey H.P. Acthar Gel medication.

Details: The move would require Mallinckrodt to pay back large sums of money to the federal government.

Why it matters: The drug company expects the change will eliminate 10% of its Acthar sales, and that it will have to pay up to $600 million in retroactive rebates — news that sent the company's stock plunging by 24% Tuesday to a record-low $9.87 per share.

Reality check: Acthar has been under the gun for several years now. Independent experts say the drug, which is a half-century old and treats multiple sclerosis and infantile spasms, is excessively priced and isn't any better than cheaper alternatives.

The bottom line: Mallinckrodt is fighting tooth and nail to protect Acthar because it is the lifeblood of the company. The drug makes up 35% of Mallinckrodt's revenue.

Go deeper: The drug pricing maze

Go deeper

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Illustration: Aïda Amer/Axios

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Xi Jinping and other Chinese politicians and delegates listen to the national anthem duirng the closing of the 19th Communist Party Congress in 2017. Photo: Lintao Zhang/Getty Images

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Photo: Bonnie Cash/Pool/AFP via Getty Images

Sen. Tim Scott (R-S.C.) told reporters on Wednesday that he believes President Trump "misspoke" when he told the far-right "Proud Boys" group to "stand back and stand by" in response to a question about condemning white supremacy at the first presidential debate.

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