Drugmakers under fire for possible U.S. price fixing
By Deena Beasley
(Reuters) - Two prominent U.S. lawmakers on Thursday called on federal antitrust regulators to probe whether Sanofi SA <SASY.PA>, Eli Lilly and Co <LLY.N>, Merck & Co Inc <MRK.N> and Novo Nordisk A/S <NOVOb.CO> colluded to set prices for insulin and other diabetes drugs.
The request by Vermont Independent Senator Bernie Sanders and Democratic Congressman Elijah Cummings of Maryland, follows a similar letter they sent last fall calling for an investigation into 14 drug companies over price increases of generic drugs.
U.S. prosecutors could file the first charges by the end of the year in their subsequent criminal investigation of generic drugmakers over suspected price collusion, Bloomberg reported on Thursday. (http://bloom.bg/2e6cZjF)
A DoJ spokesman declined to comment.
In their latest letter to the Justice Department and Federal Trade Commission, Sanders and Cummings raised questions about sky-rocketing prices for insulin, and included a chart showing that many of the price spikes appeared to occur in tandem.
They noted that the original patent on insulin, a hormone used by diabetics to control blood sugar levels, expired 75 years ago.
Sanofi spokeswoman Ashleigh Koss said in an emailed statement that "Sanofi sets the prices of our treatments independently."
Novo Nordisk also said it sets prices "independently" and stands by its business practices. Officials at Lilly and Merck did not immediately respond to requests for comment.
Shares of several generic drugmakers fell after the report of pending DoJ charges. Mylan N.V. <MYL.O> closed down 6.9 percent on Thursday, Allergan Plc <AGN.N> fell 4.5 percent and Endo International Plc <ENDP.O> dropped 19.5 percent. Teva Pharmaceuticals Inc Ltd <TEVA.TA>, which recently acquired Allergan's generics business, fell 9.5 percent.
"We do not think the major generic companies have likely participated in significant pricing collusion," A/B Bernstein analyst Ronny Gal said in a research note.
Several generic drugmakers, including Mylan, Allergan, Endo and Taro Pharmaceutical Industries Ltd <TARO.N>, had previously disclosed that they were subpoenaed in connection with the antitrust investigation by the Justice Department. Bloomberg said the probe spans more than a dozen companies and about two dozen drugs, citing people familiar with the matter.
Impax Laboratories Inc <IPXL.O> said earlier this year that the DOJ had requested information on four drugs: blood pressure pill digoxin, asthma drug terbutaline sulfate, prilocaine/lidocaine cream and calcipotriene solution, which is used to treat psoriasis.
A spokesman from Teva said the company "is not aware of any facts that would give rise to an exposure to the company with respect to these subpoenas.”
Officials at Endo and Lannett Company Inc <LCI.N> did not immediately respond to requests for comment.
Aggressive drug pricing has come under intense scrutiny after Democratic presidential candidate Hillary Clinton tweeted her intent to tackle high prices last year.
An August report from the Government Accountability Office found that more than 300 of 1,441 generic drugs analyzed had at least one price increase of 100 percent or more between the first quarter of 2010 and the first quarter of 2015.
In February, Sanders and Cummings asked the U.S. Department of Health and Human Services' enforcement arm to investigate generic drug price increases.
Recent price hikes that have drawn fire included Turing Pharmaceuticals' decision in 2015 to raise by 5,000 percent the price of a decades-old treatment for a dangerous parasitic infection.
Generic drugmakers, possibly reacting to the political headwinds, reined in price hikes this year.
Guggenheim Securities, citing polling of generic drugmakers, last month estimated that overall U.S. generic drug prices would dip by a percentage in the mid-single digits this year.
The price erosion has been felt by drug wholesalers like McKesson Corp <MCK.N> and Amerisource Bergen Corp <ABC.N>, which rely on price fluctuations for part of their profit margins.
(Reporting by Deena Beasley in Los Angeles, Sarah Lynch in Washington D.C., Nikhil Subba and Sweta Singh in Bengaluru; Editing by Saumyadeb Chakrabarty, Bernard Orr)
