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Mylan and Teva decline as report says generic-drug companies face probe of alleged price fixing

The alleged victims are health-care consumers and taxpayers, who pay for overcharges on common antibiotics, blood-pressure medication, arthritis treatments and anxiety pills

Drug pills and tablets
Generic-drug companies reject price-fixing claims, saying investigators lack evidence of a conspiracy

Shares of generic-drug companies including Teva Pharmaceutical Industries Ltd (TEVA:NYSE) and Mylan NV (MYL:NASDAQ) fell Monday after The Washington Post reported that an antitrust lawsuit brought by states over two drugs has expanded into a probe of alleged price-fixing by at least 16 companies.

The alleged victims, according to the Post, are US health-care consumers and taxpayers, who pay for overcharges on common antibiotics, blood-pressure medications, arthritis treatments and anxiety pills. Hurt are hospitals, pharmacists and health insurers, according to the report.

READ: Delays to Mylan’s Wixela inhaler to hit Consort Medical’s annual profits by £3m

The article cited as an example albuterol, a decades-old asthma drug sold by Canonsburg, Pennsylvania-based Mylan and Sun Pharmaceuticals Ltd of India. The price of a tablet has skyrocketed to more than $4.70 from $0.13, according to the Post.

Manufacturers reject the claims, according to the Post, saying investigators lack evidence of a conspiracy.

Generics account for 90% of US prescriptions but just 23% of costs, according to the Post, citing the Association for Accessible Medicines, a trade group.

The ADRs of Jerusalem-based Teva tumbled 5.9% to $18.27 in Monday’s New York Stock Exchange trading while Mylan declined 2.3% to $29.82 on the Nasdaq. But Pfizer Inc (PFE:NYSE), which has become active in generics, climbed 0.4% to $44.10.



Contact Dennis Fitzgerald at dennis@proactiveinvestors.com

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Price: 14.42 USD

NASDAQ:MYL
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