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Generic drug price-fixing probe eyes Mylan exec
A multiyear civil investigation by 45 states into alleged price-fixing of 15 generic drugs widened dramatically on Tuesday to include the No. 2 executive at pharmaceutical giant Mylan.
The state attorneys general are looking to sue Mylan President Rajiv Malik, court papers show. If the states get court permission to widen their case, Malik would be the first senior executive ensnared in the investigation.
In the 235-page amended complaint, the states claim 18 companies — including Mylan, Lannett, Teva, Emcure and Sandoz — fixed the prices of popular generic drugs, sometimes tripling their cost.
In one case, Teva is accused of more than doubling the price of Nystatin, used to treat diaper rash, to $100.30 — up from $47.06, im April 2014, according to the suit.
In 2015, sales of generic drugs in the US reached an estimated $74.5 billion, according to the suit.
“Given direct involvement of executives in this case and the evidence we had implicating them, we felt as a group of antitrust enforcers, that it was important to hold these individuals accountable,” Connecticut Assistant Attorney General Joseph Nielsen said on a conference call with reporters.
Other executives are under investigation and the conduct was “very widespread across the industry,” said Nielsen, who is heading of the probe.
Mylan shares tumbled on the news that Malik could be sued — falling 6.6 percent, to $35.71.
The Netherlands-based drugmaker quickly came to Malik’s defense.
“Mylan has deep faith in the integrity of its president, Rajiv Malik, and stands be- hind him fully,” the company said in a statement. A lawyer for the executive said Malik “emphatically and categorically denies the allegations.”
Malik has worked at Mylan for a decade after stints at Sandoz and Ranbaxy Labora- tories. He has served as president of the company since 2012.
The states are also looking to add a second executive to its suit — Satish Mehta, the CEO of Indian drugmaker Emcure Pharmaceuticals. The company could not immediately be reached for comment.
“We allege in this complaint that the defendant companies’ collusion was so pervasive that it essentially eliminated competition from the market for these 15 drugs in its entirety,” Connecticut Attorney General George Jepsen said.
The result was higher drug prices for all.
The Justice Department is operating a parallel criminal probe. That investigation has resulted, so far, in guilty pleas from two former executives of Heritage Pharmaceuticals, a subsidiary of Emcure.
Lawmakers in Washington have held hearings recently about rising drug prices — elevating the profile of the matter across the country.
Mylan had its reputation sullied during one of those hearings when Congress questioned the price of its allergy shot EpiPen. The company promised reforms.
This summer, Mylan cut its long-held 2018 earnings-pershare target.