New Delhi: Twenty Indian generic pharmaceutical companies have been named in an anti-trust lawsuit in the US. Some of India’s most prominent drug makers such as Sun Pharma, Dr Reddy’s Laboratories, Aurobindo Pharma, Wockhardt, Lupin, Glenmark and Zydus Cadila have been included in the suit. Several senior executives of these companies have also been named.
The 524 page lawsuit, filed last week, says that some of these drug companies had hiked prices by as much as 1000%. It examined over 100 drugs.
It says that these companies “artificially inflated” prices of generic drugs through “collusive bid rigging and market allocation agreements designed to prevent price wars from occurring.”
The lawsuit contains evidence such as emails, text messages, telephone records and testimonies of former company insiders. The document says:
These anticompetitive agreements are further refined and coordinated at regular “industry dinners,” “girls’ nights out,” lunches, parties, golf outings, frequent telephone calls, e-mails and text messages.
The mode of operation of these companies was allegedly to enter into a conspiracy where one company raises prices and others respond with similar rises. In other cases, these companies allegedly decided to distribute different parts of the market between each other instead of competing, which would have inevitably brought the prices down.
Some of the ailments which these drugs were used to treat included HIV, anti-depressants, asthma and cholesterol.
The first lawsuit in this case was filed in 2016. An amended complaint was filed in 2018. Last week was the second lawsuit. Four US states are involved in the case, lead by the attorney general of Connecticut, General William Tong. Investigations have been on since 2014 and began in Connecticut.
The stocks of some of these companies have reportedly fallen after the lawsuit was filed. Sun Pharma has been hit the worst. Its shares dropped nearly 20%, but recovered somewhat by the end of day. Sun Pharma is also facing a SEBI probe on charges of an alleged diversion of funds.