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U.S. Justice Department subpoenas Taro over generic drug pricing

Published 2016-09-11, 01:43 p/m
© Reuters.  U.S. Justice Department subpoenas Taro over generic drug pricing
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By Sarah N. Lynch

WASHINGTON, Sept 11 (Reuters) - Taro Pharmaceutical Industries Ltd. TARO.N and two of its senior officers received grand jury subpoenas last week in connection with a federal antitrust investigation into generic drug pricing, the company disclosed late on Friday.

The company, which is headquartered in Israel, said it received subpoenas on Sept. 8 from the Justice Department's Antitrust Division.

The subpoenas seek documents related to "corporate and employee records, generic pharmaceutical products and pricing" and the company's "communications with competitors and others" related to the sale of generic products.

The filing, which was posted after U.S. markets closed on Friday, did not name the two executives who were subpoenaed.

"Taro intends to respond to the subpoena and otherwise cooperate with the Department of Justice investigation," the company said in the filing.

Spokesmen for Taro and the Justice Department could not be immediately reached on Sunday for comment.

Taro is the maker of many popular generic over-the-counter ointments, including antibiotic pain relief and Hydrocortisone creams used to relieve itching and minor skin rashes.

It also manufacturers prescription creams such as Clobetasol, which treats a variety of skin disorders including eczema and psoriasis.

A story published by the Boston Globe last year highlighted concerns about the rising prices of some generic drugs, including one made by Taro, called Clobetasol. The newspaper reported that the price of Clobetasol rose from $0.26 per gram in 2013 to $4.15 in 2015.

It was not clear from Friday's filing whether Clobetasol is among the products being reviewed by the Justice Department.

The rising cost of prescription medications in general has become a high-profile issue over the last year, with a variety of companies coming under scrutiny for drastically raising the prices of their drugs and devices.

Companies including Valeant Pharmaceuticals (NYSE:VRX) VRX.TO and Turing Pharmaceuticals were both targets of congressional investigations earlier this year for hiking the price of life saving drugs, with Turing also facing antitrust probes by the Federal Trade Commission and the New York Attorney General.

Separately, Valeant faces investigations by federal prosecutors into its pricing and distribution. recently, Mylan NV MYL.O has come under fire for raising the price of its allergy auto-injector Epipen. The New York Attorney General disclosed earlier this month he had launched an antitrust probe into the company's contracts to provide Epipens to schools. The company is also facing congressional probes.

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