- Flickr/Kiran Foster
The Department of Justice has accused two executives of fixing prices of a generic antibiotic and an anti-diabetic medication, in the first charges to be leveled after a sweeping two-year investigation into the matter.
Heritage Pharmaceuticals former president Jason Malek and former CEO Jeffrey Glazer were charged with colluding to “rig bids, and fix and maintain prices of doxycycline hyclate sold in the United States,” according to a court filing. A second count charged the two with doing the same with glyburide, a drug used to control blood sugar levels in people with Type 2 diabetes. The charges were first reported by Bloomberg News, which also reported last month that Federal prosecutors may start bringing down charges regarding price fixing as part of a larger investigation into generic drugmakers. EpiPen-maker Mylan and Teva Pharmaceuticals are among the other companies under investigation.
In a statement, Heritage said it was cooperating with the DOJ’s investigation, and that Malek and Glazer had been terminated after an internal investigation. Heritage also noted that the company filed a complaint against the two “to seek redress for an elaborate embezzlement and self-dealing scheme.”
“We are deeply disappointed by the misconduct and are committed to ensuring it does not happen again,” the statement said.
A number of the companies involved in the investigation are traded publicly, and are trading down on the news.
- Mylan is down 2%. Lannett is down 2.4%. Teva is down around 2%. Actavis is down about 1%. Impax Laboratories is down 2.3%. Endo Pharmaceuticals (its subsidiary Par Pharmaceutical Holdings is involved) is down 2%.
Covis Pharma Holdings Sarl, Sun Pharmaceutical Industries, Mayne Pharma, Endo International’s subsidiary Par Pharmaceutical, and Taro Pharmaceutical Industries also received subpoenas in connection to this investigation.
Here’s the description of the first count related to the antibiotic doxycycline hyclate, according to documents filed in the Eastern District Court of Pennsylvania.
“From in or about April 2013 and continuing until at least December 2015 … the defendant and co-conspirators knowingly entered into and engaged in a combination and conspiracy with other persons and entitites engaged in the production and sale of generic pharmaceutical products, including doxycycline hyclate, the primary purpose of which was to allocate customers, rig bids, and fix and maintain prices of doxycycline hyclate sold in the United States. The combination and conspiracy engaged in by the defendant and co-conspirators was in unreasonable restraint of interstate and foreign trade and commerce in violation of Section 1 of the Sherman Act.”