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<ul><li>Over 40 states in the US have filed a lawsuit against 20 drugmakers led by Teva Pharmaceuticals, an Israeli firm, for allegedly conspiring to raise prices of drugs. </li><li>Seven Indian drugmakers - <keyword id="44642" type="CITY" weightage="20" keywordseo="Sun-Pharma">Sun Pharma</keyword>, Dr Reddy’s Laboratories, Glenmark Pharma, Lupin Wockhardt, Zydus Pharma and Aurobindo Pharma - have been named in the antitrust lawsuit. </li><li>The lawsuit alleges that the concerned pharmaceutical firms colluded to raise the prices of over 100 medicines.</li></ul> Over 40 states in the US have <a href="https://www.livemint.com/industry/manufacturing/top-indian-drug-makers-accused-of-fixing-prices-1557774708125.html">filed a lawsuit</a> against 20 drugmakers led by Teva Pharmaceuticals, an Israeli firm, for allegedly conspiring to raise prices of drugs in the US market. Seven Indian drugmakers - Sun Pharma, Dr Reddy’s Laboratories, Glenmark Pharma, Lupin Wockhardt, Zydus Pharma and Aurobindo Pharma - have been named in the antitrust lawsuit, which was filed at the end of last week following the culmination of a multi-year investigation into the US pharma industry. Sun Pharma’s share price on the Bombay Stock Exchange <a href="https://www.google.com/search?q=sun+pharma+share+price&amp;rlz=1C1GCEU_enIN820IN820&amp;oq=sun+pharma+share+price&amp;aqs=chrome..69i57j0l5.4788j1j4&amp;sourceid=chrome&amp;ie=UTF-8">fell 13% </a>yesterday before recovering. The lawsuit alleges that the concerned pharmaceutical firms colluded to raise the prices of over 100 medicines and divide up the addressable market for the medicines as opposed to competing normally against each other. Teva is said to be <a href="https://www.philly.com/business/generics-teva-pennsylvania-new-jersey-drugs-price-fixing-20190513.html">the driving force </a>behind the collusion. Between 2013 and 2015, the Israel drugmaker reportedly fixed prices on 86 medicines, the complaint from the states alleged. The price increases on some drugs were as high as 1,000%. The drugmakers have to deal with more than just the lawsuit from the states. Even the US Department of Justice is investigating the companies for antitrust violations. Speaking on the matter, a spokesperson for Sun Pharma told <a href="https://www.livemint.com/industry/manufacturing/top-indian-drug-makers-accused-of-fixing-prices-1557774708125.html">Mint</a>, ““We believe the allegations made in these lawsuits are without merit and we will continue to vigorously defend against them." If successfully argued, the lawsuit could result in billions of dollars worth of fines for the concerned companies. The fines for Indian pharma firms are expected to be in <a href="https://timesofindia.indiatimes.com/business/india-business/7-indian-pharma-cos-face-lawsuits-from-over-40-us-states/articleshow/69315711.cms">the tens of millions of range</a>, since their participation was reportedly limited. For their part, the drugmakers have argued that the price increases were a result of market factors like supply shocks and consolidation among rivals. SEE ALSO: <a href="https://www.businessinsider.in/generic-drugs-are-americas-solution-to-high-branded-drug-prices-but-recent-events-suggest-the-markets-not-working/articleshow/67200320.cms">Generic drugs are America's solution to high branded drug prices. But recent events suggest the market's not working</a>

Seven Indian pharma companies are being dragged into a US lawsuit over high drug prices

<ul><li>Katherine Eban’s “Bottle of Lies”, launched in US on May 14, warns Americans against generic drugs made abroad.</li><li>The book is an account of the lapses in good manufacturing practices by drug exporters to US.</li><li>Indian companies are big exporters of medicines to US and are already squeezed between shrinking prices and regulatory pressures.</li></ul> Drug makers in India have relied on Americans to buy a big chunk their produce for a long time now. It had paid off well for many years until recently. Between rising competition squeezing prices, regulatory pressure to keep prices lower, and an expanding lawsuit into a purported conspiracy, Indian companies have found the US market to be a tougher place than it ever was. The latest blow has come in the form of a new book, "Bottle of Lies", which "argues that generic drugs are poisoning us," <a href="https://www.nytimes.com/2019/05/13/books/review/bottle-of-lies-katherine-eban.html" data-type="tilCustomLink" target="_blank">according to the New York Times</a>. It's "an invaluable exposé, a reportorial tour de force and a well-turned epic," the reviewer David Dobbs added. The controversy that forms the heart of the book is nearly a decade old. Dinesh Thakur blew the lid on an Indian company Ranbaxy for cutting corners and compromising on quality of drugs before <a href="https://dineshthakur.com/about-2/" data-type="tilCustomLink" target="_blank">quitting the company in 2005</a>. The case unraveled over the years in courtrooms, Congressional hearings, and public discourse that damaged the reputation of India as the 'pharmacy of the world'. The <a href="https://in.reuters.com/article/ranbaxy-settlement-felony-usa-idINDEE94C0DA20130513" data-type="tilCustomLink" target="_blank">case has since been settled</a> at the US Federal Drug Administration (USFDA) for $500 million, <a href="https://www.livemint.com/Companies/tvbrlhX1YGdm7GshBC44VL/Sun-Pharma-completes-Ranbaxy-merger-shares-jump.html" data-type="tilCustomLink" target="_blank">Ranbaxy has been bought over</a> by Sun Pharma, India's largest drug maker with a <a href="https://www.sunpharma.com/sites/all/themes/sunpharma/images/annual/IR%20Presentation%20Feb%202018%20(INR).pdf" data-type="tilCustomLink" target="_blank">huge stake in the US market</a>. But the troubles of Indian drug makers are far from over. On one hand, there is a two-pronged pressure consistently squeezing drug prices-- one from <a href="https://www.businessinsider.in/The-Trump-administration-has-a-little-known-practice-in-the-pharma-industry-in-its-crosshairs/articleshow/64124087.cms" data-type="tilCustomLink" target="_blank">the Trump administration</a> and the other from the <a href="https://www.livemint.com/market/mark-to-market/us-disruption-may-have-singed-indian-pharma-but-it-is-emerging-stronger-1557253325315.html" data-type="tilCustomLink" target="_blank">rising competition</a> in generic drugs. Over the past three years, sales per marketed product (in US) have declined by about 30%, according to a report by global investment bank Nomura in March 2019. At the same time, <a href="https://www.businessinsider.in/seven-indian-pharma-companies-are-being-dragged-into-a-us-lawsuit-over-high-drug-prices/articleshow/69318841.cms" data-type="tilCustomLink" target="_blank">seven Indian companies</a> -- Sun Pharma, Dr Reddy’s Laboratories, Glenmark Pharma, Lupin, Wockhardt, Zydus Pharma and Aurobindo Pharma-- are facing a lawsuit in over 40 American states for acting like a cartel to keep drug prices up. "However, given intensifying competition due to faster generic approvals and regulatory headwinds, the litigation raises the risk associated with the US generics business for companies involved in the litigation," a report from an Indian brokerage, Motilal Oswal, on May 14 said. And Eban's book, which will only further worsen the narrative for the Indian companies, had the endorsement from none other than Dinesh Thakur. “The new book ‘Bottle of Lies’ exposes the truth – and it is critical that Congress hold hearings to address generic drug safety in America,” Thakur said at the book launch in Washington D.C. on Tuesday. Erin Fox, Senior Director of Drug Information and Support Services at University of Utah Health Care (UUHC), who was also present at the launch said that, "The current pass/fail system the U.S. has in place for generic manufacturers overseas is not working. We need either quality metrics for suppliers or more transparency to make quality-based purchasing decisions." Any regulatory action based on this advice will put Indian companies in a deeper pit than the one they are already in. SEE ALSO: <a href="https://www.businessinsider.in/one-chart-from-a-big-pharma-ceo-reveals-how-drug-pricing-in-the-us-really-works/articleshow/68174467.cms" data-type="tilCustomLink" target="_blank">One chart from a big pharma CEO reveals how drug pricing in the US really works</a> <a href="https://www.businessinsider.in/seven-indian-pharma-companies-are-being-dragged-into-a-us-lawsuit-over-high-drug-prices/articleshow/69318841.cms" data-type="tilCustomLink" target="_blank">Seven Indian pharma companies are being dragged into a US lawsuit over high drug prices</a>

A frightening new book on the safety of generic drugs could send India’s pharma industry into an even deeper pit

<ul><li>The American drug regulator approved 953 new generic drugs between October 2018 and June 2019.</li><li>This is the highest number of approvals in the first nine months of any fiscal year from the USFDA, according to a report.</li><li>While the new approvals will put pressure on existing drugs to be cheaper, the silver lining for companies is that new applications have slowed down.</li></ul>The United States Food and Drug Administration (USFDA) has generously doled out approvals for new drugs and that is likely to show in the profits of Indian drug makers like <keyword id="44642" type="CITY" weightage="20" keywordseo="Sun-Pharma">Sun Pharma</keyword>, <keyword id="46698" type="CITY" weightage="20" keywordseo="Lupin">Lupin</keyword>, <keyword id="7875008" type="UNKNOWN" weightage="20" keywordseo="dr-redddys-laboratories">Dr Redddy's Laboratories</keyword>, and <keyword id="70473" type="COMPANY" weightage="20" keywordseo="Aurobindo-Pharma">Aurobindo Pharma</keyword> when the earnings start tumbling out this month. The American drug regulator approved 953 new generic drugs between October 2018 and June 2019. This is the highest number of approvals in the first nine months of any fiscal year from the USFDA, according to a report from Ashika Institutional Research. Companies have been battling the pricing pressure in US for a while now and the profit squeeze has taken a lot out of stock prices in recent years. On one hand, there is a two-pronged pressure consistently squeezing drug prices-- one from <a href="https://www.businessinsider.in/The-Trump-administration-has-a-little-known-practice-in-the-pharma-industry-in-its-crosshairs/articleshow/64124087.cms" data-type="tilCustomLink" target="_blank">the Donald Trump administration</a> and the other from the <a href="https://www.livemint.com/market/mark-to-market/us-disruption-may-have-singed-indian-pharma-but-it-is-emerging-stronger-1557253325315.html" data-type="tilCustomLink" target="_blank">rising competition</a> in generic drugs. Over the past three years, sales per marketed product (in US) have declined by about 30%, according to a report by global investment bank Nomura in March 2019. At the same time, <a href="https://www.businessinsider.in/seven-indian-pharma-companies-are-being-dragged-into-a-us-lawsuit-over-high-drug-prices/articleshow/69318841.cms" data-type="tilCustomLink" target="_blank">seven Indian companies</a> -- Sun Pharma, Dr Reddy’s Laboratories, Glenmark Pharma, Lupin, Wockhardt, Zydus Pharma and Aurobindo Pharma-- are facing a lawsuit in over 40 American states for acting like a cartel to keep drug prices up. "However, given intensifying competition due to faster generic approvals and regulatory headwinds, the litigation raises the risk associated with the US generics business for companies involved in the litigation," a report from an Indian brokerage, Motilal Oswal, on May 14 said. At rock bottom While the new approvals will put pressure on existing drugs to be cheaper, the silver lining for companies is that new applications have slowed down. "We are seeing mild slowdown with total 696 ANDAs submitted in the first 9 months of the fiscal year, down 8% (YoY). As major generic companies continue to exit unattractive products, ANDA (generic drug) submissions are seeing this slowdown," the report said. In terms of profit margins, Indian drug makers, who rely a lot on the US market for their revenue, have little to lose and a lot to gain from the low base of previous years. According to estimates from Karvy, the margin for most companies is expected to have widened significantly in the three months ended June 2019, compared to the same period a year earlier. <table style="width: 166pt;"> </colgroup> <tbody><tr> <td class="xl66" style="height:15.0pt;width:82pt">Company</td> <td class="xl67" style="border-left-width: initial; border-left-style: none; width: 84pt;">Profit Margin</td> </tr> <tr> <td class="xl68" style="height: 15pt; border-top-width: initial; border-top-style: none;">Lupin</td> <td class="xl69" style="border-top-width: initial; border-top-style: none; border-left-width: initial; border-left-style: none;">+732 basis points</td> </tr> <tr> <td class="xl68" style="height: 15pt; border-top-width: initial; border-top-style: none;">Sun Pharma</td> <td class="xl69" style="border-top-width: initial; border-top-style: none; border-left-width: initial; border-left-style: none;">-253 basis points</td> </tr> <tr> <td class="xl68" style="height: 15pt; border-top-width: initial; border-top-style: none;">Torrent Pharma</td> <td class="xl69" style="border-top-width: initial; border-top-style: none; border-left-width: initial; border-left-style: none;">+118 basis points</td> </tr> <tr> <td class="xl68" style="height: 15pt; border-top-width: initial; border-top-style: none;">Cadila Health</td> <td class="xl69" style="border-top-width: initial; border-top-style: none; border-left-width: initial; border-left-style: none;">-45 basis points</td> </tr> <tr> <td class="xl68" style="height: 15pt; border-top-width: initial; border-top-style: none;">Dr Reddy's Labs</td> <td class="xl69" style="border-top-width: initial; border-top-style: none; border-left-width: initial; border-left-style: none;">+217 basis points</td> </tr> <tr> <td colspan="2" class="xl70" style="border-right:1.0pt solid black; height:15.0pt;width:166pt">Source: Karvy Stock Broking </td> </tr> <tr> <td colspan="2" class="xl72" style="border-right:1.0pt solid black; height:15.75pt">100 basis points make 1%</td> </tr></tbody></table> SEE ALSO: <a href="https://www.businessinsider.in/donald-trump-on-generic-drugs-indian-pharma-and-katherine-ebans-new-book-with-dinesh-thakur/articleshow/69407566.cms" data-type="tilCustomLink" target="_blank">The man who brought Ranbaxy to its knees is pushing for ‘Made in India’ tag on drugs sold in US</a>

USFDA has set a new record in generic drug approvals this year-- but Indian drug makers have a lot to gain and little to lose

<ul><li>Generic drugs from India and China may clash with a campaign in US led by former Ranbaxy whistleblower Dinesh Thakur.</li><li>In an exclusive interview with Business Insider, Thakur revealed his plan to force regulatory changes in US.</li><li><keyword id="7651171" type="UNKNOWN" weightage="20" keywordseo="katherine-ebans-new-book">Katherine Eban's new book</keyword>, <keyword id="7651172" type="UNKNOWN" weightage="20" keywordseo="bottle-of-lies">Bottle of Lies</keyword>, raises alarming concerns about generic drugs in the US.</li><li>This will be an added challenge for Indian drug makers already faced with pricing pressures in US.</li></ul>These are not the best of times for Indian pharma companies. Recently, a US lawsuit alleged that Sun Pharma’s Taro amongst other generic drug makers colluded with each other to <a href="https://www.businessinsider.in/seven-indian-pharma-companies-are-being-dragged-into-a-us-lawsuit-over-high-drug-prices/articleshow/69318841.cms">keep prices high</a>. The news spooked pharma stocks and lost nearly 10% of their value in less than a month. But, there is more bad news to come. A <a href="https://www.businessinsider.in/business/us-generic-drugs-risk-rises-for-indian-pharma-after-new-book-launch/articleshow/69332570.cms">frightening new book</a> called ‘Bottle of Lies’ by Katherine Eban accuses generic drugs of poisoning. This exposé sounds a death knell to Indian generic drug makers, who sell off-patent drugs to US and Europe. At the heart of this ‘cheap generics’ argument is a man called Dinesh Thakur who was a director at Ranbaxy ten years back. He blew the lid off of illegal practices by Indian pharmacos cutting corners and compromising on quality, <a href="https://dineshthakur.com/about-2/">before quitting the company in 2005</a>. Now, he is going a bit further to bring in a law where a consumer can know “where” the medicine in manufactured. Will he win the campaign to make drugs safer? Business Insider caught up with the man at the centre of this freshly brewing storm. Here are the edited excerpts. Katherine’s book and the whole conversation around it, is it coming across as something that is targeting Indian companies? The issue of data integrity is not unique to India. We see these problems here in the US as well. We see these problems in China, we have seen similar problems in Europe. The issue is what is it that we are going to do differently. Up until now, the people who really talked about this were people who worked in the industry or policymakers. A book like this puts the issue in the hands of common people who are patients and consumers. So, the conversation is much broader. To answer the question that you are asking, you know, does this mean we are trying to bash India, absolutely not. There is discussion about a big US manufacturer in there. It’s not just limited to India. What will be your next step in the US? In the US context, there is clearly a model that the FDA has followed. In 2012, the US Congress broadened the remit of the FDA, which was a local agency until then. It did not have offices outside of the country (US). Now we are pushing Congress to look at the data and see if the model works. If it’s not, what do we need to do differently. We are asking the House Energy and Commerce Committee, which oversees the Department of Health and Human Services, under which FDA comes, we are asking the committee to hold public hearings and have this discussion. That’s on the regulatory side. There are things that can be done from the patient’s side. For example, there is no legal requirement right now for the retail medicine to disclose where a certain product is manufactured. One of the things we are pushing for is for the Congress to make a law to disclose this. What it does is to put the power in the hands of the people. When I go and buy my medicines from a local pharmacy here, I can look it up and say this medicine was made in Shanghai in China, or this was made in a facility in India, and I can then decide whether I want to buy that medicine or not. Today, we don’t have that information. Do you have any political backing for this? We have a bunch of like-minded people trying to create some public awareness and in the Congress. Isn’t this against the tone taken by the Trump administration, which wants to make medicines affordable. Adding compliance costs might not help. Do you the government will go for this? The discussion on price, especially in the US, is centered around patented medicines, because those are really, really expensive. Most of the medicines made in India and China have very low price points -- typically between $10-$15 for a 30-day course. A part of what we are trying to do is highlight, that you can only cut the bone only so thin. After a point, there is not going to be any meat on it. The discussion is also about how low can you go before you stop manufacturers from cutting corners. This argument again plays into the hands of the multinationals, as we call them here. It takes the argument away from the cost of drugs to the quality and safety. My answer was in the US context. In India, the context is completely different. We have price controls. We have the National Pharmaceutical Pricing Authority (NPPA), which determines the prices of essential medicines. There is no equivalent of that in the US. But Indian companies are also focussed more on the US. They are more worried about what’s happening in the US. I agree with you completely. The advocacy we do in India will be very different from what we do in the US. What has been the political response in the US so far? The book has just come out. We are just starting this campaign. We had a similar campaign in 2015, after the Ranbaxy case broke. But at that time, the response was---we have this new law and we have to give it some time for it to take effect. We have an election next year. The price of prescription drugs is a big issue. When the Ranbaxy case came to light, one of the arguments as that the standards cannot be the same for US, a developed market, and India, where providing medicines itself is a big challenge. Will that challenge remain in India? I believe so. Unfortunately, the big difference between India and the US is that we have a lot of data here (US). The institutions here make decisions based on data. Unfortunately, India doesn’t do that. The Central Drugs Standard Control Organisation (CDSCO) is the most opaque of organisations. I have been dealing with them for six years right now. Having said that, how do you make the case that someone who is making Rs 500 a day and has to spend Rs 200 on medicines, and if the medicine doesn’t work, what system do we have capture that information? In India, we don’t even a system to recall drugs. Your next few months of advocacy will be focussed on the US. Is there another Ranbaxy kind of incident that you have come across in the recent months, which will be a part of your campaign? In the book, there are two or three companies that there is a deep dive into. So, the book does a deep dive into Ranbaxy on what really happened there. There is also a deep dive into Wockhardt. Now that the book is public, I can talk about it. There is also a deep dive into Mylan, which is a West Virginia, US-based company. On the question of regulations, do you think there is a need to revisit the settlement process? The book goes into detail about jurisdiction. While the FDA has the mandate to inspect a foreign facility, how do you prosecute in a foreign jurisdiction? Who will serve a subpoena in a foreign country? I think that’s a discussion that has to happen at the Congressional level but I am not qualified to answer that. Can the FDA have a SEC kind of approach while dealing with violations? There are examples in the book that will make your hair stand. Why is it that the penalties we impose on serial wrong-doers are purely financial? That’s a good question. To what extent can we hold individuals accountable, not just impose financial penalties, which is cost of doing business. You take a risk and if you get caught, you just pay money and move on. Unless you hold individuals accountable, some of this behaviour won’t change. Hopefully, this book will create that level of awareness among people so that we can demand, when it comes to healthcare, it should not be a SEC kind of settlement. Do you think Indian companies have come a long way in the last six years? I think so…. But we really have to change the attitude that we have one set of standards for the local market and another for the export market. Unless that changes, all the improvements we are trying to make… What have we spent money doing? We have upgraded our plants, we have made them clean, sterile, and we got new equipment. We have invested a lot in third-party training. We have hired consultants who charge $8,000 a day. That’s what we have been doing for the last five years. Right? But the real problem is where do send the people you hire at the bottom for training? You train them to make products for India and you train them to cut corners. Two years later, when they ask for a promotion, where do you promote them to? Export market. You think all that you taught them in the first 3-4 years, they are going to forget it the moment they work on an export market? It doesn’t work like that. SEE ALSO: <a href="https://www.businessinsider.in/us-generic-drugs-risk-rises-for-indian-pharma-after-new-book-launch/articleshow/69332570.cms" data-type="tilCustomLink" target="_blank">A frightening new book on the safety of generic drugs could send India’s pharma industry into an even deeper pit</a>

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Seven Indian pharma companies are being dragged into a US lawsuit over high drug prices

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A frightening new book on the safety of generic drugs could send India’s pharma industry into an even deeper pit

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USFDA has set a new record in generic drug approvals this year-- but Indian drug makers have a lot to gain and little to lose

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The man who brought Ranbaxy to its knees is pushing for ‘Made in India’ tag on drugs sold in US

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