Dr Reddy’s, Sun, Glenmark, others under lens in US
BITTER PILL Price fixing among several allegations levelled
MUMBAI: The global generic drugs industry, with Indian firms at its core, was jolted on Wednesday by allegations of a vast price-fixing conspiracy in the US aimed at keeping prices of the copycat medicines artificially high.
Attorney general George Jepsen of the US state of Connecticut, led 45 other state counterparts in a wide-ranging multistate antitrust investigation into allegations of “unreasonably restraining trade, artificially inflating and maintaining prices and reducing competition in the generic pharmaceutical industry throughout the US”.
Calling the findings “shocking”, Jepsen asked the federal court for permission to file a new complaint in the states’ pending 2014 lawsuit that raises the number of generic drug maker defendants from six to 18 in the case and the number of drugs at issue in the litigation from two to 15.
Simultaneously, for the first time, the states are also suing two senior executives—Rajiv Malik, president and executive director of Mylan NV, and Satish Mehta, chief executive officer and managing director of Emcure Pharmaceuticals Ltd, which is the parent company of Heritage Pharmaceuticals Inc. The expanded list of companies includes Dr. Reddy’s Laboratories Inc, Emcure Pharmaceuticals Ltd, Glenmark Pharmaceuticals Inc, Sun Pharmaceutical Industries Inc, and Zydus Pharmaceuticals (USA) Inc.
Reacting to the charges, a Mylan spokesperson said, “We have been investigating these allegations thoroughly and have found no evidence of price-fixing on the part of Mylan or its employees. Our review of the Connecticut Attorney General’s press release underpinning the complaint does not change our views.” A spokesperson for Dr. Reddy’s said, “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.” A Glenmark spokesperson said, “While we do not comment on ongoing litigation, Glenmark prides itself on conducting its business with the utmost integrity and complying with all applicable laws, rules and regulations.”
Emcure said it “strongly disputes the States’ claims and intends to forcefully defend against them”.
Sun Pharma and Cadila Healthcare, of which Zydus is a unit, did not respond to Mint’s email queries.
While anti-trust investigations can take years to arrive at definite chargeable conclusions, any adverse judgment or early findings will impact the reputation of the firms involved besides casting a shadow over their business.
According to a Citi Research report released on Wednesday, cumulative sales of the 13 drugs added in the lawsuit are estimated to be around $1.2 billion. “We reiterate our view (based on earlier due diligence) that proving price collusion in a court is easier said than done,” the report said.