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[QUESTCOR LETTERHEAD]

August 5, 2005

VIA FACSIMILE AND EDGAR

U.S. Securities and Exchange Commission

450 Fifth Street, N.W.

Washington, D.C. 20549

    Attention:

    Jim B. Rosenberg, Senior Assistant Chief Accountant

    RE:

    Questcor Pharmaceuticals, Inc.

Form 10-K for the fiscal year ended December 31, 2004

Filed March 31, 2005

File No. 1-14758

Dear Mr. Rosenberg:

     Questcor Pharmaceuticals, Inc. (the “Company”) is in receipt of your letter dated July 5, 2005
with respect to the Company’s Form 10-K for the fiscal year ended December 31, 2004 (“Form 10-K”).
We have responded to your comments in that letter as set forth below. For ease of reference, we
have set forth the Staff’s comments and the Company’s response for each item below. Capitalized
terms used but not otherwise defined herein have the meanings assigned to such terms in Form 10-K.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

Critical Accounting Policies

Sales Reserves, Product Returns, and Rebates, pages 28-30

    1.

    Staff Comment No. 1: We have reviewed your responses to comment 1. Please tell us
how you have complied with paragraph 6 of SFAS 48, as several statements made in your
response would appear to indicate that the price established for your products is neither
fixed nor determinable, nor can you reasonably estimate the amount of future returns.
Specifically, you state:

    •

    “the Company is unable to predict with certainty when within that six-month
period the product returns may occur;”

U.S. Securities and Exchange Commission

August 5, 2005

Page 2

    •

    “the Company is not privy to its customers’ business operating policies and
requirement regarding inventory levels;”

    •

    “it is not possible for the Company to match VA chargebacks or Medicaid rebates
with sales made during a particular year;”

    •

    “it is not possible for the Company to match returns with sales made during a
particular fiscal year.”

Company Response: The Company meets all the criteria of paragraph 6 of SFAS 48, which
permits the recognition of revenue at the time of sale.

The Company sells three products (Acthar, Ethamolin and Nascobal) which may be returned by
the purchaser during a six-month period following the expiration date of the product lot.
Through contract manufacturers, the Company manufactures these products and sells to
pharmaceutical drug wholesalers. The sale price of the products to all wholesalers is
fixed according to a published price list. Therefore, the Company’s price to its customers
is fixed and determinable at the date of sale.

The wholesalers are required to pay for product purchased on standard 2% net 30 day terms,
regardless of whether the wholesaler sells the product to its own customers. The
wholesalers are obligated to pay the Company at the time of sale, and such obligation is
not contingent on resale of the product.

All responsibility for loss or destruction passes to the drug wholesalers when they receive
the products in their warehouse. The Company’s terms of sale for Acthar, Ethamolin and
Nascobal are FOB Destination. The wholesalers’ obligation to pay the Company is not
changed if theft or physical destruction or damage occurs subsequent to the wholesalers’
receipt of the product.

The largest wholesalers to which the Company sells are Amerisource Bergen, Cardinal, and
McKesson, which are large independent companies. These wholesalers have substantial
economic substance. The Company also sells to other, smaller wholesalers who are
independent and not affiliated with the Company in any way. The Company is not able to
control or significantly influence the purchasing patterns of the drug wholesalers who
purchase our products. These are sophisticated companies that purchase our products in a
manner consistent with their industry practices and perceived business interests.

The Company is not obligated to assist the wholesalers in reselling the Company’s product,
and has no involvement or obligations in the wholesalers’ sale or distribution of products
purchased from the Company, other than occasional drop shipments provided as a convenience
to the wholesaler. The Company does provide information to physicians who prescribe or are
likely to prescribe the Company’s products, but such efforts are intended to increase
overall prescription demand for the Company’s products, and are not obligations

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August 5, 2005

Page 3

to directly bring about resale of the products by the wholesalers who purchase them from
the Company.

The Company’s products are manufactured in lots, and as required by FDA regulations, are
labeled with a specific identifying lot number. The Company sells from only one lot for
each product at one time. Depending on the amount of product sold, a lot could take four
to ten months to sell. If, for example, a lot were sold from October 2003 until March
2004, the Company maintains data on how many units were sold from that lot during that time
period. However, the Company is unable to determine whether a particular unit which is
returned was sold in October 2003 or February 2004. Except in special circumstances, such
as manufacturing constraints, the Company ceases selling from each lot four to six months
before the expiration date of the lot.

After the expiration date of a lot, the wholesalers may return product from that lot which
they have on hand. No returns are accepted after six months past the expiration date of
the lot. After the returned product is received and verified, the product is destroyed.
Because the product is past its lot expiration date, it is no longer saleable. The Company
maintains an historical database of return material requests received on each lot, and
compares the number of return material requests with the number of sales from the same lot.
This historical database of return rates by product lot enables
the Company to reasonably estimate the amount of future returns related to current sales.

There are a limited number of external factors which may affect the historical return rate,
such as the number of months from the last shipment date to the lot expiration date,
prescription demand and current inventory on hand at wholesalers. These factors are
continually assessed, and return rates may be adjusted, if it is apparent that such factors
would impact the estimated return rate of a particular lot. For example, if lot 1234 were
shipped up to 3 months prior to the lot expiration date due to manufacturing constraints,
the estimated return rate for this lot could reasonably be expected to be higher than lots
which historically stopped shipping six or more months prior to expiration date.

To date, actual product returns have been consistent with the Company’s
estimates.

Please refer to the Company’s response to Staff Comment No. 3 for information regarding
matching government chargebacks and Medicaid rebates with sales during a particular year.

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August 5, 2005

Page 4

    2.

    Staff Comment No. 2: Refer to your response to comment 1a. Please disclose within your
critical accounting estimate that the use of other likely assumptions would not produce
results materially different from those which were recorded in the Company’s financial
statements. Please note it is usually our opinion that materiality should be assessed
against net income from operations and net income, not against gross sales. Additionally,
please provide to us the amount of the accrual as of each year end and the reduction to
gross sales recorded for all years presented for product returns, government chargebacks,
Medicaid rebates, and cash discounts separately.

    Company Response: In accordance with the Staff’s comment, the Company proposes to include
the following statement in Management’s Discussion and Analysis, Critical Accounting
Policies, Sales Reserves, Product Returns, and Rebates:

    •

    “Significant judgment is inherent in the selection of
assumptions and the interpretation of historical experience as well as the
identification of external and internal factors affecting the estimates of
our reserves for product returns, government chargebacks, and Medicaid
rebates. We believe that the assumptions used to estimate these sales
reserves are the most reasonably likely assumptions considering known
facts and circumstances. However, our product return activity, government
chargebacks received, and Medicaid rebates paid could differ significantly
from our estimates because our analysis of product shipments, prescription
trends and the amount of product in the distribution channel may not be
accurate. If actual product returns, government chargebacks, and Medicaid
rebates are significantly different from our estimates, or if the
wholesalers fail to adhere to our product exchange or credit memoranda policy,
such differences would be accounted for in the period in which they become
known. To date, actual amounts have been consistent with our estimates.”

Exhibit B attached herewith presents the Company’s proposed revision to Form 10-K for the fiscal year
ended December 31, 2004, including the proposed revision set forth above.

The Company understands the Staff’s position regarding the use of net income from
operations and net income, rather than gross sales, to assess materiality. The Company
believes that, because it has a history of recurring operating losses, investors regard the
level of and growth in sales as a more relevant indicator of the Company’s financial
growth. In addition, as the Company moves from net losses to small net income amounts,
assessment of materiality against net income becomes more challenging, as nearly all
transactions would be deemed material when assessed against a small net income amount.
The Company

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August 5, 2005

Page 5

    will consider the Staff’s position in evaluating future disclosures and explanations.

    As requested by the Staff, Exhibit A attached herewith presents the amounts of accruals for
product returns, product replacements, government chargebacks, Medicaid rebates, and cash
discounts as of December 31, 2004 and 2003, the reduction in gross sales recorded for 2004,
2003 and 2002 for product returns, government chargebacks, Medicaid rebates, and cash
discounts, and the increase to cost of product sales recorded for 2004, 2003 and 2002 for
product replacements.

    3.

    Staff Comment No. 3: Refer to your response to comment 1e. We maintain our belief
that your disclosure related to estimate of product returns is material and could be
improved. Schedule II Valuation and Qualifying Accounts does not provide a breakdown of
the current provisions nor actual returns or credits by the fiscal year that these items
relate to. Please provide to us a roll forward of the liability for each estimate for
each period presented showing the following:

    •

    Beginning balance,

    •

    Current provision related to sales made in current period,

    •

    Current provision related to sales made in prior periods,

    •

    Actual returns or credits in current period related to sales made in
current period,

    •

    Actual returns or credits in current period related to sales made in prior
months and,

    •

    Ending balance

Company Response: In accordance with the Staff’s comment, the Company proposes to provide
a schedule presenting roll-forward amounts in the requested format for the reserves for
credit memoranda product returns and product exchanges. These reserves represent 75% of the total amount of sales
reserves at December 31, 2004. Exhibit B attached herewith
presents the Company’s proposed revision to Form 10-K, Item 7, Management’s Discussion and
Analysis, Critical Accounting Policies, for the fiscal year ended December 31, 2004.

For Medicaid rebates and government chargebacks, due to the nature of the Company’s sales
process, the actual rebates and chargebacks cannot be related to the sales of a specific
fiscal year. The Company sells its products to pharmaceutical drug wholesalers. The drug
wholesalers maintain an inventory of product consistent with their industry practices and
perceived business interests. The drug wholesalers resell their inventory of products to
hospitals, pharmacies, and secondary distributors, who may also maintain an inventory of
product. The hospitals and pharmacies dispense the product to end users in response to
prescriptions written by physicians. Thus, the date on which the Company sold the product
to the wholesaler may be months or years different from the date of sale to the end-user
government entity or state Medicaid agency. The requests for

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August 5, 2005

Page 6

    rebates and chargebacks do not provide the product lot number, which is the Company’s only
method of relating product sales to a specific time period.

    4.

    Staff Comment No. 4: Refer to your response to comment 1f. We do not believe
assessing materiality against gross product sales is appropriate. Until you demonstrate
otherwise, we believe you should discuss the amount of and reason for fluctuations for
product returns in your discussion of results of operations.

    Company Response: The Company understands the Staff’s position regarding the use of net
income from operations and net income, rather than gross sales, to assess materiality. The
Company believes that, because it has a history of recurring operating losses, investors
regard the level of and growth in net sales as a more relevant indicator of the Company’s
financial growth. In addition, as the Company moves from net losses to small net income
amounts, assessment of materiality against net income becomes more challenging, as nearly
all transactions would be deemed material when assessed against a small net income amount.
The Company will consider the Staff’s position in evaluating future
disclosures and explanations.

    Exhibit B attached herewith presents the Company’s proposed revision to Form 10-K, Item 7,
Management’s Discussion and Analysis, Results of Operations, for the fiscal year ended
December 31, 2004. Page 30 discusses the amount of and reason for fluctuations in
net product sales due to reserves for credit memoranda product returns.

Consolidated Financial Statements

Consolidated Statements of Operations

Note to Consolidated Financial Statements, Page 61

General

    5.

    Staff Comment No. 5: We have considered your response to comment 5 but continue to
believe that your current disclosure does not meet the requirement of paragraph 37 of FAS
131. We believe that the intent of paragraph 37 is to achieve greater disaggregation than
total revenue from pharmaceuticals. We believe you should show revenue by product or
major product line such as therapeutic category.

    Company Response: In accordance with the Staff’s comment, the Company proposes to provide
information on revenue by therapeutic category in Management’s Discussion and Analysis of
Results of Operations and Note 1 to Consolidated Financial Statements. Exhibit B

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Page 7

attached herewith presents the Company’s proposed revision to Form 10-K, Item 7,
Management’s Discussion and Analysis, Results of Operations and
Note 1 to Consolidated Financial Statements, for the fiscal year ended
December 31, 2004.

Note 1. Organization and Summary of Significant Accounting Policies

Revenue Recognition, page 63-64

    6.

    Staff Comment No. 6: Refer to your response to comment 6. We do not believe that you have
adequately justified your compliance with SFAS 48 as it would appear that any estimated costs
or losses associated with a product return or replacement should be reported as a reduction of
sales revenue. Please provide to us your ba