Specter of antitrust charges looms as Justice Department probes generic price hikes
- The Wall Street Journal's Ed Silverman reports that the U.S. Justice Department has issued subpoenas to two generic drug makers, Lannett and Impax Laboratories, as part of a probe into possible antitrust violations by generic drug manufacturers amid soaring medication prices.
- The subpoenas were issued by the antitrust division of the Justice Department and request documentation regarding communications between the companies and rival generic drug makers.
- The companies say they will cooperate fully with the investigation. If the Justice Department doesn't like what it finds, this could lead to a historic antitrust lawsuit against major pillars of the U.S. pharmaceutical industry. Prices for some generic drugs have tripled in the past years.
This probe has been some time in the making. Last month, Sen. Bernie Sanders (I-VT) and Rep. Elijah Cummings (D-MD) announced that their committees would be holding hearings about and looking into many major pharmaceutical players over the generic drug price hikes. The lawmakers issued letters to Ranbaxy, Endo, Actavis, Sun Pharma, and 10 other generics manufacturers.
It isn't hard to see why the generic prices have raised eyebrows. As Silverman notes, one analysis from last year found that "half of all generic medicines sold through retailers became more expensive during the previous 12 months and that prices paid by pharmacies more than doubled for one out of 11 generics."
Some of the generics whose prices have skyrocketed include albuterol sulfate, which has increased 40-fold in cost, and common cholesterol meds like pravastatin sodium. Seeing as generics make up the overwhelming majority of drug prescriptions in America (86%), it's no surprise that the government is taking a close, hard look at these pricing practices.
This one could get ugly. Stay tuned.
- Wall Street Journal Justice Department Probes Generic Companies After Price Hike Reports