First charges come in generic price-fixing probe
- The Department of Justice on Wednesday charged two former executives of generic drugmaker Heritage Pharmaceuticals with conspiring to fix prices for certain drugs, an initial step in a sweeping federal antitrust investigation into the generic pharmaceutical industry.
- Ex-CEO Jeffrey Glazer and Jason Malek, Heritage's former president, were each hit with two-count felony charges alleging they worked to fix prices for a generic antibiotic and a generic diabetes medicine.
- The Antitrust Division of the DOJ has joined with the FBI, the U.S. Postal Service and the U.S. Attorney's Office for the Eastern District of Pennsylvania to investigate suspected price collusion, reportedly issuing subpoenas to a wide range of generic companies.
According to the charges unsealed Wednesday, Glazer and Malek allegedly conspired to set prices, rig bids and allocate customers for the antibiotic doxycycline as early as April 2013 through at least December 2015.
As early as April 2014 until at least December 2015, the two also colluded to fix prices and steer customers towards glyburide, a generic diabetes drug, the DOJ alleges.
"By entering into unlawful agreements to fix prices and allocate customers, these two executives sought to enrich themselves at the expense of sick and vulnerable individuals who rely upon access to generic pharmaceuticals as a more affordable alternative to brand-name medicines," said Deputy Assistant Attorney General Brent Snyder of the DOJ's Antitrust Division.
A number of other generic drugmakers, including Mylan N.V, Endo International plc, Lannett Co and Impax Laboratories have disclosed the receipt of subpoenas from the DOJ concerning the sale, marketing and pricing of generic drugs.
According to a report from Bloomberg, the investigation could extend to more than a dozen companies and cover over 20 products.
Shares in many generic drugmakers, including industry giants Teva and Mylan, fell on news of the charges.
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