(Representative image)

MUMBAI: Over 40 US states filed lawsuits against pharma biggies, including seven domestic companies, over collusion in inflating prices of widely-prescribed generic medicines, in certain cases as high as 1000%.

The 500-page case filed by US states on May 10, charged global biggies like Teva, Pfizer, Sandoz and Mylan, as well as domestic companies like Sun Pharma ’s US arm Taro , Zydus , Lupin , Aurobindo, Dr Reddy’s, Wockhardt and Glenmark of conspiring to inflate prices of medicines, and stifling competition for generic drugs. The lawsuit widens a complaint of price collusion filed in 2016, which is still pending in US courts after being first investigated in 2014.

Domestic companies said they would defend these allegations. A Sun Pharma spokesperson said “We believe the allegations made in these lawsuits are without merit, and we will continue to vigorously defend against them.” The US probe on price fixing seems to have impacted overall domestic pharma sector, with stock prices of most companies witnessing a drop on the BSE of 4-9% on Monday. Sun Pharma scrip tanked the most by nearly 10% to Rs 397.

The domestic industry, already grappling with pricing pressure in US, faces one of the biggest such probes ever, which if proven can incur litigation and financial burden on companies, experts say. The development put a dampener on the entire sector, as US is the most lucrative market contributing a significant portion to revenues.

“The role of domestic companies (under investigation) appears to be minimal, probably to the extent of three to four molecules, while we expect the penalty would not be over $50 million each”, Surajit Pal associate vice-president, Prabhudas Lilladher told TOI. Over years, the industrywide scheme reportedly affected prices of over 300 generic drugs in the US including HIV, diabetes, asthma medication, high cholesterol, oral antibiotics, blood thinners, cancer drugs, contraceptives and antidepressants. The 20 drug companies reportedly engaged in illegal conspiracies to divide up the market for drugs to avoid competing and, in some cases, conspired to either prevent prices from dropping or to raise them, according to the complaint by 44 US states, filed in US district court in Connecticut.

Soaring drug prices from both branded and generic manufacturers have sparked outrage in US, with criticism coming from across the political spectrum, including from President Donald Trump.

