Monday, May 30, 2016
Sun Pharma, India's largest drug maker , has received a grand jury subpoena from the anti-trust division of the US Department of Justice seeking documents from the company and its affiliates relating to corporate and employee records, generic products and pricing, communications with competitors and others regarding the sale of generic pharmaceutical products , the company said in a May 27 stock exchange filing.
The company said in its opinion the inquiry is unlikely to have any material adverse impact on the consolidated operations or consolidated financial results of the company. Sun Pharma drew $2.2 billion or almost half of its total revenues from the US last year. Sun is set to announce it fourth quarter earnings on Monday.
While the granular details of the subpoena were not available immediately, two market analysts were of the view that the move may lead to a subdued sentimental outlook in the near term for Sun Pharma, which is already grappling with manufacturing compliance issues pointed out by the US FDA at its key facilities like Hallol in Gujarat. A sharp increase in prices of several generic drugs over the last few years have raised alarm in the US and large drug makers have been quizzed as part of congressional inquiries.
About 10% of generic drugs doubled in price between July 2013 and June 2014, and half of all generic drugs rose in price, Bloomberg said in a report citing a 2015 analysis by Centers for Medicare and Medicaid.
In 2014, top Indian drug makers such as Sun Pharma and Dr Reddy's were among 14 drug makers named by the US Congress over escalation in prices of certain generic medicines and were asked to share information about the prices they were charging.
They were also asked to share details about gross revenues, prices paid for drugs and factors that may have contributed to the increase in the prices. Senator Bernie Sanders and Elijah Cummings, ranking member of the House Committee on Oversight and Government Reform, had then sent a letter noting the "staggering" price hikes and termed those moves as "outrageous". Some of the other companies probed by the Congress were Apotex, Endo, PAR and Teva.
Source : economictimes.indiatimes.com
