DRL, Sun Pharma, Glenmark among 18 under US lens on price fixing complaint

By: | Published: November 2, 2017 3:07 PM

As many as 12 more drug companies, including Dr. Reddy's, Sun Pharma and Glenmark, are likely to face probe, in addition to the six others, following complaints of "artificially inflating prices" of generics, according to Washington state Attorney General.

Drug companies, Dr Reddy, Sun Pharma, Glenmark, Washington state Attorney GeneralAs many as 12 more drug companies, including Dr Reddy?s, Sun Pharma and Glenmark, are likely to face probe, in addition to the six others, following complaints of ?artificially inflating prices? of generics, according to Washington state Attorney General.(Image: Reuters)

As many as 12 more drug companies, including Dr Reddy’s, Sun Pharma and Glenmark, are likely to face probe, in addition to the six others, following complaints of “artificially inflating prices” of generics, according to Washington state Attorney General.  An official statement issued by Attorney General (AG) of Washington State, Bob Ferguson, yesterday said AGs of 45 other states, along with him, approached a federal court seeking to expand the pending complaint, increase the number of drug companies under probe to 18 from 6 and the number of affected drugs to 15 from 2.  The states alleged that the companies violated anti-trust laws to artificially inflate prices of the drugs and agreed to divide the market to reduce competition. Some of the drugs even saw a jump in price by more than 1,000 per cent.

“I hold powerful interests accountable when they don’t play by the rules,” Ferguson said.  The drug companies are facing the charge of conspiring to fix prices and keeping them elevated.  Previously, the suit named generic drug manufacturers Heritage Pharmaceuticals, Aurobindo Pharma USA, Citron Pharma, Mayne Pharma (USA), Mylan Pharmaceuticals and Teva Pharmaceuticals USA as defendants.  The states are seeking to expand the complaint to include Actavis Holdco US, Actavis Pharma, Ascend Laboratories, Apotex Corp, Dr Reddy’s Laboratories (DRL), Emcure Pharmaceuticals, Glenmark Pharmaceuticals, Lannett Company, Par Pharmaceutical Companies Sandoz, Sun Pharmaceutical Industries and Zydus Pharmaceuticals (USA).

Dr. Reddy’s said it is “aware of the ongoing investigation by the US Department of Justice (DoJ) into this matter and the recent amended complaint issued by the Attorneys General of Connecticut and other states.  “The company intends to continue cooperating fully with all authorities on this matter and as it is sub-judice, wish to refrain from further comment at this point in time.”  Generic drugs, which enter the market after a name-brand drug manufacturer loses its exclusive patent rights, offer the prospects of lower prices and greater access to medication.  For drugs that attract a number of generic manufacturers, competition can bring down the average price by 80 per cent or more compared to brand-name alternatives. As a result, generics save consumers and the healthcare industry tens of billions of dollars annually, the statement said.

In 2015, generic drug sales in the United States were estimated at USD 74.5 billion. The generic pharmaceutical industry accounts for nearly 88 per cent of all prescriptions in the US.  In July 2014, the state of Connecticut started a probe — later joined by other states — into suspicious price increase of certain generics by up to 1,000 per cent or more, the statement said.  The investigation found evidence of direct conversation between company officials and marketing and sales executives through in-person meetings, phone calls, text messages and e- mails spanning over several years, in which they purportedly discussed efforts to fix and maintain prices, allocate markets and reduce competition for a number of generic drugs, it said.  The lawsuit also alleged that the companies knew their conduct was illegal as they often avoided communicating with each other in writing and, in some instances, intentionally deleted written communications and text messages, the AG said.

In a statement, Mylan said: “We have been investigating these allegations thoroughly and have found no evidence of price fixing on the part of Mylan or its employees.  “We have asked the various attorneys general leading this case to share with us what information they believe supports these new allegations and, to date, they have not done so. Mylan has deep faith in the integrity of its President, Rajiv Malik, and stands behind him fully.”  The drugmaker added: “Mylan takes its legal obligations seriously and operates with the highest levels of integrity and character. Mylan expects to have no further comment while the matter is pending.”  Comments from other companies were not immediately available.

The original complaint, filed on December 14, 2016, alleged that the companies entered into illegal conspiracies in order to unreasonably restrain trade, artificially inflate and manipulate prices and reduce competition in the United States for two drugs: doxycycline hyclate delayed release, an antibiotic, and glyburide, an oral diabetes medication.  The lawsuit was filed under seal in the US District Court for the Eastern District of Pennsylvania.  Portions of the complaint are edited in order to avoid compromising the states’ ongoing investigation, the AG’s statement added.  Assistant Attorneys General Erica Koscher and Michael Hemker are handling the case. In addition to Washington, other states involved in the lawsuit include Connecticut, Alaska, Alabama, Arkansas, Colorado, Delaware and the District of Columbia, the statement said.

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