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MARKET INTEL by PharmaCompass
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By PharmaCompass
2018-12-27
Impressions: 207 Article
In the US, three drugmakers have been accused of working in collusion to hike the price of a decades-old generic anti-fungal medicine, known as nystatin. According to a major federal lawsuit, the drugmakers colluded to increase the price of nystatin back in 2014.
At the heart of this accusation is a ‘smiley-faced’ text message from an employee working for the New Jersey drugmaker Heritage Pharmaceuticals. The text message was sent to an employee of a rival company. It read: “Work news: we are raising price on Nystatin. Just letting you know. :),”
According to the attorneys, post receiving that text message, the competitor (Indian drugmaker Sun Pharmaceuticals) also started increasing the price of its nystatin.
A Sun representative, however, said the allegations were meritless and that the company would continue to defend itself “vigorously.”
The complaint alleges that rival companies shared information about price increases by way of phone calls and text messages, and often doubled drug prices in unison. This large civil antitrust complaint includes communications between employees.
According to the complaint, nystatin was made by at least three generic drugmakers, all of which had employees in close contact and exchanged notes on the ensuing price hike. Forms of nystatin are used to treat common fungal infections such as yeast infections and diaper rash.
The attorneys general claim that conversations between two nystatin manufacturers Teva and Heritage date back to mid-2013. They allege the price increases had been broached internally at Teva first. However, the Teva employee who headed the pricing team initially opposed them.
Teva said in a statement that it denied the allegations and “will continue to vigorously defend itself.”
Other medications outlined in the complaint treat conditions like epilepsy, heart failure, anxiety, insomnia, hypertension, diabetes, asthma, and arthritis.
While Heritage fired its former president and CEO in 2016 after an internal investigation revealed “serious misconduct”, it said it is also suing a former executive in a separate ongoing suit. The high-ranking employees of former Heritage Pharmaceuticals, who also happen to be brothers-in-law — Jason Malek, its former president, and Jeffrey Glazer, its former CEO — have previously pleaded guilty to price-fixing and other charges in separate criminal cases.
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