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Teva Plummets Amid Massive Price Fixing Accusations; Other Generic Drugmakers Also Fall

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Teva Plummets Amid Massive Price Fixing Accusations; Other Generic Drugmakers Also Fall

Shares of generic and specialty medicines maker Teva Pharmaceutical Industries (NYSE: TEVA) fell more than 9 percent Monday morning in reaction to a lawsuit filed by 44 states.

What Happened

Teva, along with other global drug companies, is accused of conspiring to inflate the prices of their generic therapies by as much as 1,000 percent, according to the lawsuit filed last Friday. The allegations include drug companies and their executives were not only involved in a price-fixing scheme, but were aware their alleged actions were illegal.

Company executives avoided any written records of interactions by arranging meetings at industry meals, parties, rounds of golf, and networking events, according to The New York Times. Other companies named in the report include Pfizer Inc. (NYSE: PFE), Novartis AG (NYSE: NVS) and Mylan NVM (NASDAQ: MYL).

Teva's stock was the clear underperformer among the group as the Israel-based company was singled out by NYT for raising prices on nearly 400 formulations of 112 generic drugs.

Companies Deny Wrongdoing

Teva said in a statement it has "not engaged in any conduct that would lead to civil or criminal liability." The company also said it "continues to review the issue internally."

“We believe that these claims are without merit and will vigorously contest them,” Novartis said.

Pfizer said its subsidiary in charge of generic drugs intends to "vigorously defend" the allegations.

Related Links:

Credit Suisse Stays Sidelined On Teva: 'Our Growth Expectations Are Below That Of The Company'

Mylan's Disappointing Outlook Rattles Analysts, Investors

Posted-In: Generic drugs israelNews Health Care Legal Top Stories Media General Best of Benzinga

 

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