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Pharma stocks crash after US lawsuit over price manipulations | The Economic Times

The office of the attorney general of Connecticut unsealed documents, that ET has a copy of, which reveals initials and titles of individuals implicated in the conspiracy, industry “code words” and previously undisclosed emails from drug companies “brazenly discussing strategy to violate federal and state antitrust laws”. The Indian generic makers named in the lawsuit are Aurobindo, Dr Reddy’s, Emcure, Glenmark and Zydus.

The lawsuit names several senior executives of generic drug companies (only through initials), including senior sales manager at Sun Pharma, president of Sun Pharma; vice president, sales and marketing at Dr Reddy’s; president, corporate development at Emcure; executive VP at Mayne Pharma; VP national accounts at Par Pharma, and senior director of national accounts at Zydus as co-conspirators.

“The unredacted complaint sheds new light on commonly used code words used by co-conspirators as they colluded with competitors to divvy up market share and coordinate on price increases in violation of federal anti-trust law. These include ‘fair share’ and ‘playing nice in the sandbox’,” said a statement released by Elizabeth Benton, director of communications at the Attorney General Office of Connecticut to ET on April 11.

According to emails, text messages and phone records, these executives came together in several occasions to align their drug launches and pricing strategies. This included raising prices or getting off the market at the same time.

The other generic makers named in the suit include Apotex, Teva, Heritage Pharma and Par Pharma. The State of Connecticut alleged that these drug companies entered into conspiracies to fix prices and allocate customers in order to inflate and manipulate prices, reduce competition, and unreasonably restrain trade for 15 separate generic drugs. As a result of this misconduct, prices of generic drugs have skyrocketed and American consumers have been paying the financial cost, its lawsuit said.

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pharma stocks: Pharma stocks crash after US lawsuit over price manipulations – The Economic Times.