Economy

Pharma stocks soar despite USA lawsuit

Five Indian generic drugmakers have been reportedly named in a lawsuit by 45 USA states over price-fixing conspiracy, adding to their existing woes like regulator inspections and pricing pressures in their largest market. According to a Business Standard report, all three listed pharmaceutical companies – Dr Reddy's Laboratories, Glenmark Pharma and Sun Pharma - were up more than 2 per cent each on the National Stock Exchange (NSE) today.

A large group of USA states has accused as many as 18 key players in the generic drug industry – several of them based in India - of a broad price-fixing conspiracy, moving on Tuesday to widen an earlier lawsuit to add many more drugmakers and medicines.

"I hold powerful interests accountable when they don't play by the rules", Ferguson said.

The original complaint, filed in December, targeted Mylan, Heritage, Aurobindo Pharma USA Inc, Citron Pharma LLC, Mayne Pharma USA Inc and Teva Pharmaceuticals USA Inc.

Shares of pharma majors such as Sun Pharmaceuticals, Dr Reddy's Laboratories, Emcure Pharmaceuticals, Zydus Cadila Pharmaceuticals and Glenmark Pharmaceuticals advanced up to 4 per cent in Thursday's trade, even as some USA states have filed a lawsuit against these companies over alleged price cartelisation in the US.

Dr Reddy's said it is "aware of the ongoing investigation by the US Department of Justice (DoJ) into this matter and the recent amended complaint issued by the Attorneys General of CT and other states". For drugs that attract a large number of generic manufacturers, competition between them can decrease the average price by 80 percent or more, compared to brand-name alternatives.

In 2015, generic drug sales in the United States were estimated at Dollars 74.5 billion. The generic pharmaceutical industry accounts for almost 88 per cent of all prescriptions in the US.

The lawsuit initiated by the state of CT, however, also named major global generic drug-makers like Teva, Sandoz and Actavis, among other companies.

The lawsuit also alleges that the companies knew their conduct was illegal, as they often avoided communicating with each other in writing, and, in some instances, intentionally deleted written communications and text messages.

In a statement, Mylan said: "We have been investigating these allegations thoroughly and have found no evidence of price fixing on the part of Mylan or its employees. Mylan has deep faith in the integrity of its President, Rajiv Malik, and stands behind him fully". "Mylan expects to have no further comment while the matter is pending".

In addition to doxycycline hyclate delayed release, an antibiotic, and glyburide, oral diabetes medication prices of at least 13 generic drugs will be probed including medicines such as Acetazolamide, used to treat glaucoma and epilepsy; Doxycycline monohydrate, an antibiotic; Fosinopril-hydrochlorothiazide, used to treat high blood pressure; diabetes medications Glipizide-metformin and Glyburide-metformin; Leflunomide, used to treat rheumatoid arthritis; Meprobamate, an anxiety medication; Nimodipine, a calcium channel blocking agent used to reduce problems caused by a bleeding blood vessel in the brain; Nystatin, an antifungal medication;Paromomycin, an antibiotic used to treat certain parasite infections; Theophylline, used to treat asthma and other lung problems; Verapamil, used to treat hypertension; and Zoledronic acid, used to treat hypercalcemia. Portions of the complaint are redacted in order to avoid compromising the states' ongoing investigation.

Connecticut Assistant Attorney General Joseph Nielsen said on Tuesday the states would likely oppose that request, which could slow the lawsuit.

In addition to Washington, the other states involved in the lawsuit are: Connecticut, Alaska, Alabama, Arkansas, Colorado, Delaware, the District of Columbia, Florida, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico, New York, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, Puerto Rico, South Carolina, Tennessee, Utah, Vermont, Virginia, West Virginia and Wisconsin.



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