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Generics To Face Imminent Charges In Price-Fixing Probe; Mylan Tumbles

Courtesy of ZeroHedge. View original post here.

A year and a half after news first broke  in November 2016 that the DOJ – at the time still under the Obama administration – was preparing a “massive” price-fixing probe into generic drugmakers, moments ago Bloomberg reported that U.S. prosecutors are nearing their first official charges in a four-year-old criminal investigation into alleged price-fixing by generic-drug makers.

As Bloomberg adds, and the reason why the generics space is tumbling, is that at least two companies are said to be indicted in the coming months, in addition to several executives, while a third company could agree to plead guilty before then, said one the people.

Started during the Obama administration, the investigation is advancing under President Donald Trump, who has repeatedly vowed to bring down soaring drug costs in the wake of controversial price hikes by Mylan and Valeant Pharmaceuticals International Inc. A group of administration officials is working on a plan expected to be unveiled in the coming weeks.

The charges are expected to be filed as soon as this summer; they would mark a “major breakthrough” in the sprawling cross-administrational probe that began in 2014 and has spread to virtually every major generic-drug manufacturer, including Mylan and Teva.

And speaking of Mylan, the company tumbled promptly as news of the probe spread.

Adding insult to injury was the disclosure that feds have raided at least two companies in the investigation: while Perrigo had previously disclosed its offices were searched last year; we now learn that Mylan’s Pennsylvania headquarters was also raided by the FBI in the fall of 2016, according to the Bloomberg source.

The raid took place the same day that Mylan Chief Executive Officer Heather Bresch was in Washington testifying on drug prices. Bresch, who as we reported at the time, was grilled by lawmakers about the $600 price tag for a two-pack of EpiPen among other questions, is the daughter of Senator Joe Manchin, a West Virginia Democrat.

Still, neither Mylan nor its executives have been publicly charged with a crime, at least not yet. The generic drug giant previously disclosed subpoenas related to some of its generic drugs and search warrants related to the investigation, without saying where any raids took place.

Rajiv Malik, Mylan’s president, has been named as a defendant in a civil-complaint by states, which allege that he took an active role in the price-fixing conspiracy. Mylan said at the time that it stood by Malik, and a lawyer for Malik said the executive denied the allegations.

As part of the upcoming charges, companies will be accused of fixing prices and dividing up the market, according to Bloomberg.

Although indictments are expected, the companies or their executives could agree to plead guilty rather than fight the charges, said the other person. The identities of the companies set to be charged couldn’t be learned.

And on the chance they avoid prison time, generic-drug manufacturers also are facing a civil complaint filed by state attorneys general led by Connecticut. That case accuses more than a dozen companies of conspiring to raise prices on 15 drugs.


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