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Last Updated : May 14, 2019 01:38 PM IST | Source:

Drug-makers accused of price manipulation in second antitrust lawsuit in US

As per the lawsuit, the prices were hiked by as much as 1,000 percent in some drugs.

Viswanath Pilla @viswanath_pilla
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On May 13, the stocks of leading Indian pharmaceutical companies tanked, and India’s largest drug maker Sun Pharma was hit the worst, with its shares dropping almost 20 percent at one point before recovering and ending the day with a loss.

The steep fall of pharma stocks was attributed to the US antitrust lawsuit filed against 20 generic pharmaceutical companies in the country. The lawsuit named Sun Pharma, Aurobindo Pharma, Dr Reddy’s Laboratories, Lupin, Glenmark, Wockhardt and Zydus Cadila were a few Indian companies reportedly named in the lawsuit.

This was the second lawsuit filed by the attorney general of the State of Connecticut and additional attorneys general of various US states, seeking the expansion of the investigation and alleging a broad conspiracy to artificially inflate and manipulate prices, reduce competition and unreasonably restrain trade for more than 100 different generic drugs.


The second lawsuit includes additional parties and additional products which were not referred in the first one.

The lawsuit comes at a time when generic drug-makers are struggling in the US market, facing steep price erosion of drugs.

The lawsuit also named 15 individual senior executive defendants at the heart of the conspiracy, who were responsible for sales, marketing, pricing and operations.

Senior executives of Sun Pharma's subsidiary Taro, Lupin, Glenmark, Zydus Cadila were named in the lawsuit.

The lawsuit alleges that, sometimes, one company would decide to raise prices on a particular drug, and other companies would follow suit. Other times, companies would agree to divide up the market rather than compete for the market share by lowering prices.

In case of some drugs, the lawsuit mentions the prices were hiked by as much as 1,000 percent.

More evidence

Connecticut Attorney General William Tong, who is leading 44 states in the case, have said they have hard evidence to show the anti-competitive practices of these companies.

"We have hard evidence that shows the generic drug industry perpetrated a multi-billion dollar fraud on the American people. We have emails, text messages, telephone records, and former company insiders that we believe will prove a multi-year conspiracy to fix prices and divide market share for huge numbers of generic drugs,” Tong said.

The lawsuit alleges that some of these deals to fix prices have happened on golf outings or during "girls nights outs" or over text messages.

Tong said he would not stop until these companies and the individuals who had orchestrated these schemes were held accountable.

Companies version

Teva and Aurobindo Pharma have issued statements. They said they were going to defend the charges in the lawsuit.

Teva, prominently named in the lawsuit as a co-conspirator, said it would take these accusations seriously and defend them.

Aurobindo Pharma said it was currently reviewing the second lawsuit and it would be filing papers with the Federal Court in due course, denying each of the relevant accusations.

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First Published on May 14, 2019 01:38 pm
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