Perrigo has disclosed that agents of the U.S. Department of Justice Antitrust Division have carried out a search of its “corporate offices” associated with an ongoing investigation “related to drug pricing in the pharmaceutical industry.”
“The Company is taking this investigation seriously and is cooperating with the appropriate authorities,” Perrigo said in a terse statement.
The statement did not specify which offices were searched. Perrigo runs its U.S. operations from Allegan, MI, but is legally domiciled in Dublin, Ireland.
Perrigo is among a dozen companies that have disclosed they are being investigated in the Justice Department’s ongoing antitrust investigation into price fixing, bid rigging, and other anticompetitive conduct in the generic pharmaceutical industry. Other such companies include Endo International, Lannett, Mylan, and Teva Pharmaceutical Industries.
In a letter made public in March by Bloomberg News, the Justice Department sought a delay in pretrial discovery in lawsuits filed on behalf of customers contending they were overcharged for three skin treatments by manufacturers that included Perrigo and Teva as well as Akorn, the Sandoz unit of Novartis, Taro Pharmaceutical Industries, and Wockhardt.
In December, the Justice Department charged two former executives of Heritage Pharmaceuticals—former CEO Jeffrey Glazer, and former president Jason Malek—with conspiring to fix prices, rig bids, and allocate customers for an antibiotic, doxycycline hyclate. The two were also charged with conspiring to fix prices and allocate customers for the diabetes treatment glyburide.
According to the Justice Department, the doxycycline hyclate conspiracy occurred from April 2013 until at least December 2015; the glyburide conspiracy, from April 2014 until at least December 2015.
Heritage has said it is cooperating with the Justice Department. In November, Heritage sued Glazer and Malek separately through the Racketeer Influenced and Corrupt Organizations Act (RICO), asserting that the executives “looted tens of millions of dollars from Heritage by misappropriating its business opportunities, fraudulently obtaining compensation for themselves, and embezzling its intellectual property.”
Glazer and Malek pleaded guilty to the Justice Department’s two felony counts in the U.S. District Court for the Eastern District of Pennsylvania on January 9.
The investigation is being conducted by the Antitrust Division’s Washington Criminal I Section with the assistance of the FBI’s Philadelphia Division, the FBI headquarters’ International Corruption Unit, the United States Postal Service Office of Inspector General, and the U.S. Attorney’s Office for the Eastern District of Pennsylvania, the Justice Department said in December.
Also in December, attorneys general from 20 states filed a civil complaint in U.S. District Court for the District of Connecticut, also alleging price fixing of generic doxycycline.
Investors responded to Perrigo’s disclosure with a selloff of shares that drove their price down 5.8% from yesterday’s closing price of $76.23, to $71.85 as of 10:12 a.m.