Tuesday October 15, 2019 at 8:46 am

Governments across the world have decided to crack down healthcare costs. The United States of America has filed cases against Pharma companies that have allegedly indulged themselves in drug price manipulation. Amidst this, the generic drug makers of India are also suffering.

Twenty drug makers have been named in the case by the U.S and Indian Pharma companies are also on the list. Famous names like Sun Pharma, Aurobindo, Lupin, Glenmark and Zydus have also been accused of manipulating drug prices. The senior executives of these companies have also been named in the 524-page lawsuit.


Generic drugs are chemically similar to innovative drugs and they enter the U.S market once the innovative drug’s patent protection period is over. When these generics enter the market, the original drug’s cost erodes 90%. This is how policymakers bring down the cost of healthcare. The first lawsuit in the case was filed back in 2016 but then another amended lawsuit was filed in 2018.

What did these companies do?

But a case has been filed in the US District Court in Connecticut in which drug companies are accused of engaging in numerous illegal conspiracies for unreasonably restraining trade, manipulating the drug price and reducing competition. The charges are quite serious since in some cases, there was more than 1000% price collusion. It examined over 100 drugs. These drugs were meant for treating various diseases such as asthma, cholesterol, HIV and also depression.

India’s Emcure Pharma was also among the accused.

The means of manipulation by these companies was allegedly that one company in connivance with other companies would choose to raise prices of drugs and others in the market would also respond with similar rises. In other cases, companies allegedly decided to forego competition and just distributed parts of market among each other.

Tough time ahead

After the news about the case reached the people, Sun Pharma’s stock price tumbled. It reduced by 20 per cent and later recovered a bit to reach at ₹396 a piece on the Bombay Stock Exchange. Lupin shares also took a hit and reduced by 4% to reach at ₹801 while Glenmark shares at the end of the day were priced at ₹591, which is a 4% decrease.

What do the companies have to say?

The Indian Pharma companies have been defending themselves and a Sun Pharma spokesperson while talking to media said, “We believe the allegations made in these lawsuits are without merit and we will continue to vigorously defend against them.” But this is not the first lawsuit Sun Pharma has found itself in. It had also been facing a SEBI probe wherein Sun Pharma was accused of diversion of funds.

Teva and Aurobindo Pharma also responded similarly but without denying the allegations. They said that they would be examining these allegations and would surely be defending themselves.

But the lawsuit has admissible evidence in the form of emails, text messaged and phone records. former company insiders have also testified regarding the same.