US regulator targets generic drugmakers for price fixing

The US Department of Justice (DoJ) is set to file criminal charges against 14 generic drugmakers for colluding to fix prices on several drugs, Bloomberg yesterday reported, citing people familiar with the matter.

The DoJ had launched an investigation around two years back into 14 generic drugmakers involving about two dozen drugs, to find out whether some executives agreed with one another to raise prices, the report said.

Among the companies that are under the scanner are Mylan NV, Teva Pharmaceutical Industries Ltd, Actavis, which Teva recently acquired from Allergan Plc, Lannett Co., Impax Laboratories Inc., Covis Pharma Holdings Sarl, Sun Pharmaceutical Industries Ltd., Mayne Pharma Group Ltd., Endo International Plc's subsidiary Par Pharmaceutical Holdings and Taro Pharmaceutical Industries Ltd.

Some companies like Mylan, Allergan, Endo and Taro Pharmaceutical, had earlier disclosed that the DoJ had issued subpoenas seeking information about product pricing and communications with competitors.

Aggressive drug pricing has come under intense scrutiny and Democratic presidential candidate Hillary Clinton had last year tweeted that she would look into high prices of generic drugs.

The US Department of Health and Human Services started an investigation last year into generic drug prices after prodding from US Senator Bernie Sanders and Democratic Representative Elijah Cummings.

They specifically cited doxycycline hyclate 100 milligram, an antibiotic for which the price doubled in the year through June 2014.

The US government Accountability Office had in August released a report that noted more than 300 of 1,441 generic drugs analyzed had at least one price increase of 100 per cent or more between the first quarter of 2010 and the first quarter of 2015.

While the US regulators have often targeted high prices of branded drugs, they have now shifted their focus on generic drugs after many lawmakers criticised the sudden surge in prices of generic drugs.

The price of an old antiparasitic drug was raised to $750 a pill from $13.50, while Mylan was hauled up for increasing the price of EpiPen allergy shots to $600 a pair from $100 a pair in 2007. (See: Mylan raises prices of allergy medication EpiPens 500%) EpiPens are widely used in allergies to various foods, such as peanuts or shellfish, which could trigger anaphylaxis, a serious allergic reaction that usually occurs quickly and could result in death.

In May, the DoJ had subpoenaed India's largest drug maker Sun Pharmaceutical Industries Ltd seeking information about the pricing and marketing of the generic drugs it sells in the US.

Other generic drug makers including India's Dr Reddy's Laboratories Ltd and Allergan Plc also received subpoenas from regulators seeking similar information last year, but they did not disclose the names of the products involved.