US preparing to file charges in generic-drug antitrust probe: report

According to people familiar with the matter, the first charges stemming from an antitrust investigation by the US Department of Justice (DOJ) into alleged price collusion in the generic-drug industry could be filed by the end of the year, Bloomberg reported Thursday. The sources indicated that the investigation, which began approximately two years ago, now involves more than a dozen companies and about two dozen drugs, while a grand jury probe is looking into whether some executives may have conspired to raise prices.

However, Bloomberg cited the people as saying that "the situation is fluid and timing could slip" in regards to exactly when US officials may press charges, adding that the investigation will likely continue after the first cases are filed. Shares of several generic drugmakers declined on the report, with Wells Fargo analyst David Maris suggesting the news "could add a severe overhang to the sector that may last well past the presidential election and into the new year." 

Meanwhile, generic drugmakers also face a civil price-fixing investigation by the Connecticut Attorney General, who is trying to spearhead a group of states to probe the industry, in what people familiar with the matter say could result in cases seeking damages. Connecticut's Attorney General issued the first subpoenas in the investigation in 2014 to Impax Laboratories and Lannett regarding possible price fixing of the generic heart drug digoxin. According to regulatory filings by certain companies, the DOJ followed suit later that year. Bloomberg reported that the probes initially focused on mid-sized US companies, but eventually widened to include large manufacturers and the US subsidiaries of overseas companies. 

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According to Bloomberg, individual companies have made various disclosures about the inquiry, but "only a handful of drugs," including digoxin and the antibiotic doxycycline, have been identified as being under investigation. Besides Lannett and Impax, other drugmakers, which said to have received subpoenas include Teva and Mylan, which has been under intense recent scrutiny in the US over the pricing of its EpiPen (epinephrine) auto-injector. The report also indicated subpoenas had been issued to Actavis, which Teva recently acquired from Allergan, Covis Pharma, Sun Pharmaceutical, Mayne Pharma, Endo International's subsidiary Par Pharmaceutical and Taro Pharmaceutical. 

Bloomberg cited an analysis conducted by the Congressional Research Service showing that Medicaid spent 121 percent more on doxycycline from July 2013 to June 2014, compared with the prior year, despite 38 percent fewer prescriptions. Mylan and Par have acknowledged that they were asked about doxycycline, which is also made by Actavis, Sun Pharma, Mayne and Lannett, although these have not disclosed whether they have been questioned about the antibiotic. The Bloomberg report also noted that Medicaid spent 90 percent more on digoxin from 2013 to 2014, versus the previous year, despite a 16-percent decrease in prescriptions. Impax, Lannett, Par and Sun Pharma all make digoxin, while Covis manufactures the branded version of the drug under the name Lanoxin, which it sold to Concordia in 2015. Meanwhile, a representative for Mylan said that while the company makes a branded version of digoxin, it has not been subpoenaed over the drug.

A spokesperson for the DOJ would not comment on the speculation of impending charges in its generics antitrust probe, while Mylan, Allergan, Impax, Sun Pharmaceutical and Teva declined to elaborate on the matter beyond their filings, Bloomberg said. 

In 2014, members of the US Congress wrote to multiple pharmaceutical companies, including Actavis, Mylan and Teva, seeking "information about the escalating prices they have been charging for generic drugs."

For additional analysis on the drug-pricing controversy in the US, see Spotlight On: Public, political winds blowing against drug industry.

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