Which are the firms named in the lawsuit?
The firms named in the lawsuit include the world’s largest generic drug manufacturer, Teva Pharmaceutical Industries Ltd. Of the 20 companies named in the complaint, seven are Indian—Aurobindo Pharma Ltd, Glenmark Pharmaceuticals Ltd, Dr Reddy’s Laboratories Ltd, Wockhardt Ltd, Zydus, Lupin Ltd and Sun Pharma-ceutical Industries Ltd’s US arm Taro. All the Indian firms are listed entities. The firms are accused of manipulating and raising prices of generic drugs artificially to bump up profit. The 10 May complaint is an expanded document of a suit that’s under litigation and was filed by US states in December 2016.
How did the firms perpetrate the fraud?
Teva allegedly selected a core group of competitors with which it had profitable relationships. It had an understanding with them to lead and follow each other’s price increases. Industry executives arranged regular parties, industry dinners, lunches and golf outings as part of efforts to give shape to their anti-competitive agreements. The collusion began in July 2013 and continued through January 2015. During this l9-month period, Teva significantly raised prices of about 112 generic drugs. The Israeli company colluded with competitors on at least 86 of these drugs and was largely the sole company in the other markets.
Did the suit affect Indian pharma stocks?
Pharma stocks tumbled at the stock exchanges on Tuesday. The healthcare index fell 3.53% to 13,310.47 points. Sun Pharma shares ended the day down 9.39% after tanking 21% intraday.
Is the complaint backed by evidence?
The allegations in the complaint are supported by information and evidence, including the review of documents produced by many firms and individuals throughout the generic pharmaceutical industry. The complaint is backed by an industry-wide phone call database consisting of more than 11 million call records from hundreds of individuals at various levels of the defendant companies and other generic manufacturers, and information given by unidentified witnesses, who were directly involved in the alleged conduct.
How has Teva reacted to the lawsuit?
Teva said in a statement it would continue to defend itself and that while it does review prices in the context of market conditions, availability and cost of production, it does not discuss individual pricing rationale/strategies. It denied engaging in anything that would lead to criminal or civil liability. “Overall, we establish prices to enable patient access, maintain our commitment to innovative and generic medicines and fulfil obligations to our shareholders," said the Israeli pharmaceutical company.