Apotex agrees to pay $100 million over drug-pricing allegations

Barry Sherman’s drug company Apotex has paid $100 million to settle U.S. allegations that the company engaged in a widespread market-fixing conspiracy, the Department of Justice said Sunday. “Drug prices, in part because of…

Apotex agrees to pay $100 million over drug-pricing allegations

Barry Sherman’s drug company Apotex has paid $100 million to settle U.S. allegations that the company engaged in a widespread market-fixing conspiracy, the Department of Justice said Sunday.

“Drug prices, in part because of collusion, are as high as they are because drug manufacturers conspire to keep prices artificially high,” Assistant Attorney General Makan Delrahim said in a news release. “We will continue to aggressively investigate these abuses in order to protect patients and hold pharmaceutical companies accountable.”

The Sherman family sold their drug company in April and, according to Reuters, had sued to block the Department of Justice from holding the company responsible for its predecessors’ actions.

Investigators alleged in a 13-count complaint that the Canadian pharmaceutical company agreed with competitors to fix wholesale drug prices for over two decades. The Sherman family had owned 60 percent of the company. The statement said the company had agreed to pay “the largest penalty in the history of the department for health care price fixing.”

The complaint, filed in U.S. District Court in Manhattan, alleges the Sherman family “organized” a conspiracy with six other pharmaceutical companies from 1991 through 2009 that “ensured the lowest prices for their key drugs and cut into the price of other drugs.”

The statement said three other pharmaceutical companies also settled with the U.S. Justice Department without admitting wrongdoing: Teva Pharmaceuticals USA Inc., Novartis AG and Allergan PLC.

The Justice Department said each company had agreed to pay a fine of $10 million to $25 million, but those amounts have yet to be finalized. In addition, the companies agreed to work together to identify other similar cartels.

The Department of Justice said if they are successful in their investigation, “the companies that participated in the conspiracy may face additional criminal penalties and/or prosecution.”

CNN reported that the Justice Department filed an application to issue a warrant for the records of all Sherman family members or companies associated with the Sherman family.

Apotex told CNN in a statement that “the shareholders of Apotex, which was sold in April to French drug company UCB, are fully aware of and pleased with Apotex’s agreement to participate in the U.S. antitrust prosecution of drug manufacturers.” The company said its president and chief executive David E. Williams has agreed to cooperate with the Justice Department and will meet with Delrahim “to clarify his recollection of events and to ensure that the DOJ has all of the relevant documentation necessary to support the investigation.”

Apotex said its other operating subsidiaries have not been accused of any wrongdoing.

Public Citizen, an advocacy group, said in a statement Sunday that it is concerned about the Sherman family’s involvement in the investigation.

“Over the past decade, Apotex has been accused of price fixing five times in the U.S. by state and federal prosecutors,” Edwin Kagin, vice president of Public Citizen’s Health Research Group, said in a statement. “Prosecutors have found no evidence that Apotex’s practices contributed to higher drug prices for any reason, much less for cancer patients.”

Public Citizen said it would fight for laws that would make it easier to prosecute companies that engage in price-fixing.

Reuters reported that the Justice Department said it began an investigation of companies involved in the conspiracies after publicly disclosing a drug price scandal in 2008. The company’s investigation, which focused on prices between 1991 and 2008, followed more than 70 subpoenas and requests for information from 44 pharmaceutical companies, including 12 by its investigators, according to Reuters.

David E. Williams, Apotex’s president and chief executive officer, and Eugene Thornton, the company’s chief commercial officer, said in a joint statement that they are happy to be cooperating with the U.S. Department of Justice.

“We have been vocal and proud to be leaders in the pharmaceutical industry, helping to bring people life-saving medications that would otherwise be too expensive for them,” Williams and Thornton said in the statement. “The FDA is truly thrilled that Apotex will contribute to the FDA’s ongoing efforts to help bring those medications to patients.”

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