U.S. files first charges in generic drug price-fixing probe (updated)
14/12/2016 22:18
(Adds lawsuit filed by Heritage against the men, details on
probe, background)
By Diane Bartz
WASHINGTON, Dec 14 (Reuters) - The U.S. Department of
Justice accused two former generic pharmaceutical executives on
Wednesday of colluding with other generic manufacturers to fix
prices, the first criminal charges stemming from a two-year
investigation.
The two men are in talks with the government about a plea
agreement, according to a source close to the negotiations who
was not authorized to discuss the matter.
The executives, Jeffrey Glazer and Jason Malek, were charged
in Philadelphia with conspiring to fix the prices of an
antibiotic, doxycycline hyclate, and to split up the market for
glyburide, a diabetes drug, the Justice Department said.
Their former employer, Heritage Pharmaceuticals, filed a
lawsuit against them in August, saying in a complaint they were
behind a "brazen theft" and "looted tens of millions of dollars
from Heritage by misappropriating its business opportunities,
fraudulently obtaining compensation for themselves, and
embezzling its intellectual property."
Glazer and Malek were not immediately reachable, and their
attorneys did not respond to a request for comment.
Generic drug pricing became an issue in 2014, driven in
large part by media reports of rising drug prices.
In 2014, U.S. Senator Bernie Sanders and Maryland
Representative Elijah Cummings launched their own probe into
skyrocketing generic prices. They sent 17 letters to companies
to inquire about price increases for 10 drugs.
According to the FDA's website, Heritage makes extended
release doxycycline hyclate. Other makers include Mylan NV
MYL.O , Actavis, now owned by Teva Pharmaceuticals Inc
TEVA.TA , Mayne Pharma Group and Prinston Pharma.
Heritage also makes glyburide tablets, which are also made
by Pharmadax, Teva and Zydus. Heritage makes glyburide with
metformin hydrochloride, as do Aurobindo, Impax, Zydus,
Corepharma and Teva, according to the website.
Other generic drugmakers have disclosed they received
subpoenas in connection to the Justice probe or have been
previously reported to have been included in the antitrust
probe.
Heritage was among the companies that received a
congressional inquiry over its pricing for doxycycline hyclate.
Other companies in the congressional probe have since
publicly disclosed receiving subpoenas, including Mylan NV,
Allergan AGN.N , which later sold its generics business to
Teva, Lannett Co, Impax Laboratories, Par Pharmaceuticals, which
is owned by Endo Pharmaceuticals ENDP.O , Sun Pharmaceutical
Industries, Taro Pharmaceuticals Ltd and Mayne, which purchased
a portfolio of drugs from Allergan and Teva.
Shares of generic drugmakers including Mylan, Endo and Teva
tumbled after Bloomberg first reported that charges had been
filed and included those names.
(Additional reporting by Ankur Banerjee in Bengaluru, Sarah N.
Lynch in Washington and Caroline Humer in New York; Editing by
Bernard Orr and Peter Cooney)
((ankur.banerjee@thomsonreuters.com; within U.S. +1 646 223
8780, outside U.S. +91 80 6749 6132; Reuters Messaging:
ankur.banerjee.thomsonreuters.com@reuters.net))
Keywords: USA DRUG PRICING/