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Can Indian pharma weather the twin-storm in US of price-fixing and quality?

Some of the generic companies, it points out, made unsolicited bids to customers of bigger players in cases where drug prices were high as a way to compete with a bigger generic player to grab a bigger share in the market. Interestingly, this exercise seems to have elements of attempts at trying to drive down prices to gain customers.

twitter-logo E Kumar Sharma   New Delhi     Last Updated: May 16, 2019  | 11:02 IST
Can Indian pharma weather the twin-storm in US of price-fixing and quality?

Leading Indian generic pharma companies have come under the spotlight in the United States. This time for all the wrong reasons. They figure among 20 global generic companies facing, arguably, the largest ever lawsuit in the US. As many as 44 out of 50 states in United States of America (USA) have jointly come together accusing these companies of price-fixing conspiracy and violation of federal anti-trust laws and a number of state laws. Figuring among them are some of the biggest names from India -  Dr Reddy's , Aurobindo, Lupin, Glenmark, Wockhardt and Zydus apart from Taro, the US subsidiary of the largest Indian pharma company Sun Pharma.

This has been in the news for several days now and going by media reports, such as those from CBS 60 minutes - the much-watched public broadcasting channel in the US - the attorneys involved have tried to establish a case of corporate greed based on evidences pieced together from emails, text messages and documents, among others. Earlier, they had sued the pharma firms in 2016 but this 500-page lawsuit seems to be new. In response to the lawsuit, most generic companies have refuted allegations of wrongdoing, while the spokespersons of rest have chosen not to comment as the matter is sub judice.

The lawsuit refers to the modus operandi and talks of a concept of "fair share" of the market that some companies seek. Some of the generic companies, it points out, made unsolicited bids to customers of bigger players in cases where drug prices were high as a way to compete with a bigger generic player to grab a bigger share in the market. Interestingly, this exercise seems to have elements of attempts at trying to drive down prices to gain customers. For example, the lawsuit document details an example between Teva and Dr Reddy's and the latter's offer to Walgreens.

Quality in question

The price-fixing allegations need to be seen along with the New York Times article by Katherine Eban, focussed on the poor quality of generic drugs. This recently-published essay in the New York Times is adapted from her just released book - Bottle of Lies: The Inside Story of the Generic Drug Boom. But, most stories referred in the New York Times article seem dated. Indian media has already covered some of those. For instance, the stories around the USFDA (US Food and Drug Administration) inspections in India and the inspections led by its official Peter Baker. One may now have to wait to read the book to see if there are new updates and components. It is still unclear whether she has taken into account USFDA's stand, which has staunchly defended its quality measures. In fact, Scott Gottlieb, who until very recently, was the commissioner of the USFDA, has tweeted that "generics are safe" and that "the generic industry of today, and FDA oversight, is vastly better". He himself takes generic drugs and has "extreme confidence in them".

Eban's book, raising some fundamental doubts on generic drug quality coupled with the allegation of price fixing, only adds up to two storms that Indian generic players would need to ride. How well they weather the storms - be it around allegations of price fixation or on changing the perception on quality issues - only time will tell. 

Also read: Pharma Fares Better

Also read: Indian pharma majors deny allegations of price fixing in US

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