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April 24, 2018 at 06:32 PM
U.S. prosecutors are nearing their first charges against companies in an almost four-year-old criminal investigation into alleged price-fixing by generic-drug makers, according to people familiar with the matter.
At least two companies are on track to be indicted in the coming months, in addition to several executives, said two people, who spoke on condition of anonymity because the investigation is confidential. Another company could agree to plead guilty before then, said one the people.
The charges, which the people said could be filed as soon as the summer, would mark a major breakthrough in an investigation that began in 2014 and has spread to nearly every major generic-drug manufacturer, including Mylan NV and Teva Pharmaceutical Industries Ltd.
(Related: Drug Industry Set Lobbying Records As Pricing Pressure Looms)
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.
Perrigo, Mylan Raids
Federal authorities have raided at least two companies in the investigation. Perrigo Co. disclosed its offices were searched last year. Mylan’s Pennsylvania headquarters was also raided by the FBI in the fall of 2016, according to another person familiar with the matter. The raid took place while Mylan Chief Executive Officer Heather Bresch was in Washington to testify before Congress on drug prices, the person said. Bresch, who was grilled by lawmakers about the $600 price tag for a two-pack of EpiPen among other questions, is the daughter of Sen. Joe Manchin, a West Virginia Democrat.
Neither Mylan nor its executives have been publicly charged with a crime. Mylan previously disclosed subpoenas related to some of its generic drugs and search warrants related to the investigation, without saying where any raids took place.
Mylan shares fell 1.5% on the news and closed down 1.3% at $40.25 in New York. Perrigo shares fell 1.7% to $80.49 while shares of Petach Tikva, Israel-based Teva, which trade in the U.S. as American Depositary Receipts, fell 1.6% to $17.56.
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.
