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Generic drug industry is under the scanner as a large group of US states have alleged four Indian pharma companies of a broad price-fixing conspiracy.
Companies accused of deliberately keeping drug prices high include Dr Reddy’s Laboratories (DRL), Glenmark Pharmaceuticals, Sun Pharmaceutical Industries, and Emcure Pharmaceuticals.
Earlier this week, a lawsuit was filed by the attorneys of 45 states and the District of Columbia, accusing 18 companies and subsidiaries and named 15 medicines, reports Reuters.
What is the accusation?
According to the complaint filed by the states, drugmakers and executives divided customers for their drugs among themselves, agreeing that each company will have a certain percentage of the market. The companies sometimes agreed on price increases in advance, the states added.
Along with this, the lawsuit has also charged two top executives- Pune-based Emcure’s Managing Director Satish Mehta and US-based Mylan NV’s Executive Director Rajiv Malik, says the Reuters report.
According to a Business Standard report, the complaint has details of communication between Malik and executives at Emcure. Apart from this, there were 1,501 calls and text messages between executives and salespeople at Teva and its competitors between July 2013 and 2014.
At a time when more generic drug companies are entering this space as US wants to bring prices down, these allegations come as a big blow to the pharma industry.
The case is being led by Connecticut Attorney General George Jepsen who said that the price-fixing is systematic, it is pervasive, and that a culture of collusion exists in the industry.
When did the issue come to the fore?
The issue was raised in December last year when the original complaint targeted companies like Mylan, Heritage, Aurobindo Pharma USA Inc, Citron Pharma LLC, Mayne Pharma USA Inc and Teva Pharmaceuticals USA Inc.
Adding to the woes, the new complaint has more companies on the radar including Novartis AG’s unit Sandoz, India-based Sun Pharmaceutical Industries Ltd, Endo International PLC’s unit Par Pharmaceutical, Dr. Reddy’s Laboratories, Apotex Corp, Glenmark Generics Ltd, Lannett Company Inc, Alkem Laboratories Ltd’s unit Ascend Laboratories and Cadila Healthcare Ltd’s unit Zydus Pharmaceuticals Inc.
Increase in drug prices
In the original lawsuit, inflated prices of two medicines were mentioned. Price of doxycycline rose from USD 20 for 500 tablets to USD 1,849 between October 2013 and May 2014, according to US Senator Amy Klobuchar, a Minnesota Democrat who had been pressing for action on high drug prices.
The new complaint will include glipizide-metformin and glyburide-metformin, which are among the most commonly used diabetes treatments.
Others include: acetazolamide, which is used to treat glaucoma and epilepsy; the antibiotic doxycycline monohydrate; the blood pressure medicine fosinopril; the anti-anxiety medicine meprobamate; and the calcium channel blocking agent nimodipine.
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