US states sue 5 Indian generic drug makers over price cartelisation
, ET Bureau|
Updated: Nov 02, 2017, 09.25 AM IST
MUMBAI: At least five Indian companies are among 12 generic drug manufacturers named in a new lawsuit over alleged price cartelisation in the US, adding to their existing headaches including regulator inspections and pricing pressures in their largest market.
Sun Pharmaceuticals, Dr Reddy’s Laboratories, Emcure Pharmaceuticals, Zydus Cadila Pharmaceuticals and Glenmark Pharmaceuticals are among companies sued jointly by 45 US states over charges of colliding with each other to fix prices of nearly 15 drugs.
The lawsuit initiated by the state of Connecticut also names global majors such as Teva, Sandoz and Activis among other drug companies in a probe, which is an extension of a 2014 investigation where six companies were under the scanner.
The new lawsuit has also named some individual executives, including Rajiv Malik, president of Mylan, and Satish Mehta, MD of Emcure Pharma.
More individuals’ names could be added, according to the office of Connecticut attorney general George Jespen who filed the new civil suit on Tuesday.
“Our investigation is ongoing, and while we are unable to specify if or when we may take additional action against other companies or individuals, there is the possibility that additional individuals will be named in the future,” Jaclyn M Severance, director of communications office of the attorney general, said in an email response to ET.
“We are unable to speculate on how long the investigation and litigation may take,” she said.
The 45 states in their suit have alleged multiple conspiracies that restrained trade, artificially inflated and/or maintained prices and reduced competition in the generic drug industry. “Because generic drug makers don't face the same research and develop costs involved in bringing a branded drug to market, generic drugs should be less expensive and less prone to dramatic price spikes,” it argued.
The lawsuit, which runs over 200 pages, has detailed how sales representatives of drug companies met regulatory in get-togethers known as “Girls Night Out” or “Women in the Industry” dinner, where executives shared sensitive information regarding the pricing of the drugs.
It alleged that Heritage Pharma, the US subsidiary of Emcure, was a consistent participant in the conspiracies identified in the complaint.
“Through its senior-most executives and account managers, Heritage participated in a wideranging series of restraints with more than a dozen generic drug manufacturers, all of whom knowingly and willingly participated,” the lawsuit claimed. “As a result of these conspiracies, defendants reaped substantial monetary rewards,” it said.
Emcure strongly disputed the allegations.
“The states’ rhetoric about collusion leading to rising Doxycycline DR prices is completely at odds with the facts,” the company said in a statement to ET.
Sun Pharmaceuticals, Dr Reddy’s Laboratories, Emcure Pharmaceuticals, Zydus Cadila Pharmaceuticals and Glenmark Pharmaceuticals are among companies sued jointly by 45 US states over charges of colliding with each other to fix prices of nearly 15 drugs.
The lawsuit initiated by the state of Connecticut also names global majors such as Teva, Sandoz and Activis among other drug companies in a probe, which is an extension of a 2014 investigation where six companies were under the scanner.
The new lawsuit has also named some individual executives, including Rajiv Malik, president of Mylan, and Satish Mehta, MD of Emcure Pharma.
More individuals’ names could be added, according to the office of Connecticut attorney general George Jespen who filed the new civil suit on Tuesday.
“Our investigation is ongoing, and while we are unable to specify if or when we may take additional action against other companies or individuals, there is the possibility that additional individuals will be named in the future,” Jaclyn M Severance, director of communications office of the attorney general, said in an email response to ET.
“We are unable to speculate on how long the investigation and litigation may take,” she said.
The 45 states in their suit have alleged multiple conspiracies that restrained trade, artificially inflated and/or maintained prices and reduced competition in the generic drug industry. “Because generic drug makers don't face the same research and develop costs involved in bringing a branded drug to market, generic drugs should be less expensive and less prone to dramatic price spikes,” it argued.
The lawsuit, which runs over 200 pages, has detailed how sales representatives of drug companies met regulatory in get-togethers known as “Girls Night Out” or “Women in the Industry” dinner, where executives shared sensitive information regarding the pricing of the drugs.
It alleged that Heritage Pharma, the US subsidiary of Emcure, was a consistent participant in the conspiracies identified in the complaint.
“Through its senior-most executives and account managers, Heritage participated in a wideranging series of restraints with more than a dozen generic drug manufacturers, all of whom knowingly and willingly participated,” the lawsuit claimed. “As a result of these conspiracies, defendants reaped substantial monetary rewards,” it said.
Emcure strongly disputed the allegations.
“The states’ rhetoric about collusion leading to rising Doxycycline DR prices is completely at odds with the facts,” the company said in a statement to ET.
