Great article from Bloomberg. Concordias Covis portfolio could be in for some heavy fines. We now have Cma, UK parliament and the US department of justice ready to shut down this clown show.
U.S. prosecutors are bearing down on generic pharmaceutical companies in a sweeping criminal investigation into suspected price collusion, a fresh challenge for an industry that’s already reeling from public outrage over the spiraling costs of some medicines.
The antitrust investigation by the Justice Department, begun about two years ago, now spans more than a dozen companies and about two dozen drugs, according to people familiar with the matter. The grand jury probe is examining whether some executives agreed with one another to raise prices, and the first charges could emerge by the end of the year, they said.
Though individual companies have made various disclosures about the inquiry, they have identified only a handful of drugs under scrutiny, including a heart treatment and an antibiotic. Among the drugmakers to have received subpoenas are industry giants Mylan NV and Teva Pharmaceutical Industries Ltd. Other companies include Actavis, which Teva bought from Allergan Plc in August, Lannett Co., Impax Laboratories Inc., Covis Pharma Holdings Sarl, Sun Pharmaceutical Industries Ltd., Mayne Pharma Group Ltd., Endo International Plc’s subsidiary Par Pharmaceutical Holdings and Taro Pharmaceutical Industries Ltd.
All of the companies have said they are cooperating except Mayne, which said it didn’t expect the inquiry to have a material impact on earnings, and Covis, which said last year it was unable to assess the outcome of the investigation.
Mylan, Allergan, Impax, Sun and Teva declined to comment beyond their filings. Spokesmen for Endo, Covis, Taro, Lannett and Mayne didn’t respond to requests for comment. A Justice Department spokesman declined to comment.
Shares of all companies named in the investigation fell on the news. Lannett dropped 23 percent to $18.15 at 2:27 p.m. in New York trading. Impax fell 14 percent to $17.70. Endo declined 19 percent to $14.80, while Teva slipped 7.6 percent to $40.08, Allergan fell 4.1 percent to $189.87 and Mylan fell 6 percent to $34.51. Shares of Concordia Healthcare Corp., which bought most of Covis’s assets, fell 4.8 percent to 4.41 Canadian dollars. Taro shares fell 7 percent to $93.96. Sun and Mayne shares do not trade on U.S. exchanges.
Harsh Criticism
Drug pricing has met harsh criticism from U.S. lawmakers in the past year. Former hedge fund manager Martin Shkreli set off the firestorm and drew the ire of Democratic presidential candidate Hillary Clinton after he acquired an old antiparasitic drug and raised the price to $750 a pill from $13.50. Valeant Pharmaceuticals International Inc. was lambasted by Congress for boosting prices of older drugs. In September, representatives grilled Mylan Chief Executive Officer Heather Bresch over the company’s sixfold price increase since 2007 to $600 for a pair of EpiPen allergy shots.
While attention so far has been focused mainly on branded drugs, which are more expensive, the Justice Department probe is now bringing the generics industry into the fray.