7 Indian drug firm named in US lawsuit inflating prices

7 Indian drug firms named in US lawsuit for inflating prices

9:43 AM, 14th May 2019
Generic drugs
Generic drugs. (File photo)

MUMBAI, INDIA: More than 40 US states have filed lawsuits against major pharma companies, including seven domestic firms, over collusion in inflating prices of widely prescribed generic medicines, in certain cases as high as 1000%.

The 500-page case filed by the states on May 10 charged global leaders like Teva, Pfizer, Sandoz and Mylan, as well as domestic companies like Sun Pharma’s US arm Taro, Zydus, Lupin, Aurobindo, Dr Reddy’s, Wockhardt and Glenmark with conspiring to inflate prices of medicines, and stifling competition for generic drugs.

The lawsuit widens a complaint of price collusion filed in 2016, which is still pending in US courts after being first investigated in 2014.

Domestic companies said they would defend these allegations. A Sun Pharma spokesperson said, “We believe the allegations made in these lawsuits are without merit, and we will continue to vigorously defend against them.”

The US probe on price-fixing seems to have impacted the domestic pharma sector overall, with stock prices of most companies witnessing a drop on the BSE in the range of 4-9% on Monday. Sun Pharma’s scrip tanked the most by nearly 10% to Rs 397.

The domestic industry, already grappling with pricing pressure in the US, faces one of the biggest such probes ever which, if proven, can incur litigation and financial burden on companies, experts say. The development put a damper on the entire sector, as the US is the most lucrative market, contributing a significant portion to revenues.

“The role of domestic companies (under investigation) appears to be minimal, probably to the extent of three to four molecules. We expect the penalty would not be over $50 million each,” Surajit Pal associate vice-president, Prabhudas Lilladher, told TOI.

Over years, the industry-wide scheme reportedly affected prices of over 300 generic drugs in the US including HIV, diabetes, asthma medication, high cholesterol, oral antibiotics, blood thinners, cancer drugs, contraceptives and antidepressants. The 20 drug companies reportedly engaged in illegal conspiracies to divide up the market for drugs to avoid competing and, in some cases, conspired to either prevent prices from dropping or to raise them, according to the complaint by 44 US states, filed in US district court in Connecticut.

Soaring drug prices from both branded and generic manufacturers have sparked outrage in the US, with criticism coming from across the political spectrum, including from President Donald Trump.

© Times of India 



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