Major Indian drug companies such as Dr Reddy’s Laboratories (DRL), Sun Pharmaceutical Industries and Glenmark Pharmaceuticals are likely to face probe in the US following complaints of artificially inflating prices of generic drugs.
An official statement issued by Attorney General (AG) of Washington State, Bob Ferguson, said AGs of 45 other states have approached a federal court seeking to expand the pending complaint, increase the number of drug companies under probe to 18 from six and the number of affected drugs to 15 from two.
The states have alleged that the companies violated anti-trust laws to artificially inflate prices of the drugs and agreed to divide the market to reduce competition. According to states, some of the drugs even saw a jump in price by more than 1,000 per cent.
According to a CARE Ratings July 2017 report, the USA alone accounted for 40.6 per cent of the Indian pharmaceutical exports. “In 2015-16, exports to the USA surged by 27.8 per cent to $5.5 billion on a year-on-year basis. However, the export scenario to the USA weakened and it grew by a marginal 1.3 per cent to $5.6 billion in 2016-17,” the CARE Ratings report stated.
In July 2014, Connecticut initiated an investigation, later joined by the other states, into suspicious price increases of certain generic pharmaceuticals — in some cases by up to 1,000 percent or more. The lawsuit – which was filed at US District Court for the Eastern District of Pennsylvania — named generic drug manufacturers Heritage Pharmaceuticals, Aurobindo Pharma USA, Citron Pharma, Mayne Pharma (USA), Mylan Pharmaceuticals and Teva Pharmaceuticals USA as defendants.
The states are now seeking to expand the complaint to include companies such as Actavis Holdco US, Actavis Pharma, Ascend Laboratories, Apotex Corp, DRL, Emcure Pharmaceuticals, Glenmark Pharmaceuticals, Lannett Company, Par Pharmaceutical Companies Sandoz, Sun Pharmaceutical Industries and Zydus Pharmaceuticals (USA).
“Dr Reddy’s is aware of the on-going investigation by the US Department of Justice (DoJ) into this matter and the recent amended complaint issued by the Attorneys General of Connecticut and other States. 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.” the DRL said in its statement.
Glenmark told The Indian Express: “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, rules and regulations.” Sun Pharma, Emcure Pharma and Zydus Pharma did not respond to the queries sent by The Indian Express.
In its response on Friday evening, Mylan Pharma told The Indian Express: “We have been investigating these allegations thoroughly 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. We have asked the various attorneys general leading this case to share with us what information they believe supports these new allegations and, to date, they have not done so. Mylan has deep faith in the integrity of its President, Rajiv Malik, and stands behind him fully. Mylan and Rajiv Malik both intend to defend this case vigorously, and we look forward to the opportunity to present a full defense.”
Generic drugs, which enter the market after a name-brand drug manufacturer loses its exclusive patent rights, offer the prospect of lower prices and greater access to prescriptions for US consumers. “For drugs that attract a large number of generic manufacturers, competition between them can decrease the average price by 80 per cent or more, compared to brand-name alternatives. As a result, generic drugs save consumers and the health care industry tens of billions of dollars annually,” Ferguson said.
In 2015, generic drug sales in the United States were estimated at $74.5 billion, and the generic pharmaceutical industry accounts for approximately 88 per cent of all prescriptions written in the United States.