Mylan Shares Tumble On Generic Drugs Collusion Probe
by Tyler Durden
Mylan’s second-highest-ranking executive, Rajiv Mailk, is the target of a civil investigation by dozens of states conducting in a widespread, multiyear probe into alleged price collusion by makers of generic drugs.
As Bloomberg reports, state attorneys general said they’re seeking to sue Rajiv Malik, Mylan’s president and executive director, as part of an expanded complaint against pharmaceutical companies from 45 states and the District of Columbia, according to a statement by Connecticut Attorney General George Jepsen.
Malik would be the first senior executive from a major drugmaker sued in the case.
“These conspiracies were part of a much broader, overarching industry code of conduct that enabled the defendant manufacturers to divvy up the market for specific generic drugs in accordance with an established, agreed-upon understanding for assigning each competitor their share of the market,” Jepsen said in the statement.
Connecticut and other states are asking a federal judge to allow them to add to their existing complaint against six drugmakers.
Mylan share price immediately fell over 7% on the news…
Led by Jepsen, the civil investigation is naming executives for the first time, as well as expanding the number of drugmakers in the probe to 18 from 6, and the number of drugs to 15 from two, according to Jepsen. Previously, it had focused on an antibiotic and an oral diabetes medication, which it said executives had fixed prices on while meeting at trade shows, customer events and dinners.
The drugmakers the states are seeking to add to the lawsuit include Apotex Inc., Dr. Reddy’s Laboratories Ltd., Lannett Co., Glenmark Pharmaceuticals Ltd., Endo International Plc’s Par Pharmaceutical unit, Novartis AG’s Sandoz unit, Sun Pharmaceutical Industries Ltd. and others. Mylan and Teva Pharmaceutical Industries Ltd. were among the drugmakers named in the earlier version of the suit.
“‘We allege in this complaint that the defendant companies’ collusion was so pervasive that it essentially eliminated competition from the market for these 15 drugs in its entirety,” Jepsen said. The result, he said, was higher costs for patients and states.