As many as 20 Indian generic drug manufacturing firms have been hit with a US anti-trust lawsuit.
Companies include some of the biggest pharma manufacturers – Sun Pharma, Dr Reddy’s Laboratories, Aurobindo Pharma, Wockhardt, Lupin, Glenmark and Zydus Cadila.
“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,” said the document.
- Several senior executives of companies are also named in the antitrust lawsuit concerning unethical pricing.
- The case that examined over 100 drugs said that the drug companies in question hiked prices by as much as 1000%.
- The prices were “artificially inflated” for generic drugs through “collusive bid rigging and market allocation agreements designed to prevent price wars from occurring.”
- The lawsuit encompasses evidence in the form of telephone records, text messages, emails and testimonies of former company insiders.
As per the lawsuit, the companies used a modus operandi wherein they allegedly to conspire when one company hikes prices, others respond with similar hikes.
The companies also allegedly distributed parts of the market among themselves instead of entering fair competition – which is instrumental in bringing the prices down for consumers. The drugs in question include ones used to treat HIV, anti-depressants, asthma and cholesterol.
Damaging for reputation of Pharma majors
After the lawsuit filing went public, several of the companies saw their share prices dip. The worst hit has been Sun Pharma whose shares dropped almost 20%. Sun Pharma stated to Business Standard that the allegations did not carry any merit.