Dr Reddy’s, Sun, Glenmark, others under lens in US
Price fixing among several allegations levelled
MUMBAI: The global generics industry, with several Indian companies at its epi-centre, was shaken to the core after Attorney General George Jepsen of the US State of Connecticut led 45 other attorneys generals 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 allegations “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, the 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 Pharmacuticuals (USA), Inc.
Reacting to the charges a Mylan NV spokesperson said, “We have been investigating these allegations 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 and regulations.”
A statement from Emcure stated, “Emcure strongly disputes the States’ claims and intends to forcefully defend against them. The States’ rhetoric about collusion leading to rising Doxycycline DR prices is completely at odds with the facts. Throughout the time that Emcure is falsely accused of directing Heritage to fix prices and allocate market shares on Doxycycline DR, Heritage never raised the price of the product to a single customer and prices fell overall by 75%. Moreover, Heritage aggressively competed for business, doubling the market share of the incumbent seller, which had a 100% market share before Heritage’s entry.”
Sun Pharma and Cadila Healthcare did not respond to Mint’s email queries.
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.