US pharmaceuticals face price fixing lawsuits

Twenty states in the United States have filed lawsuits against a number of pharmaceutical companies over accusations of price fixing in the industry.

Executives from Mayne Pharma, Mylan NV, Teva Pharmaceuticals, Heritage Pharmaceuticals, Aurobindo Pharma, and Citron Pharma LLC are alleged to have propped up prices of generic versions of an antibiotic drug and a diabetes treatment drug.

"Beginning as early as 2013, defendants Heritage, Mylan, and Mayne knowingly agreed to allocate and divide the market for the generic drug Doxy DR," the US Department of Justice said in a filing on Thursday.

Shares in Mayne plunged as much as 24% on Friday as a result of the news that the Australian company was involved in the suits.

The move is part of a wider attack on big pharma in the United States, with the practice of overcharging clients being heavily criticised by lawmakers from both sides of the political aisle in Washington.

The charges were denied by both Myland Teva, while Heritage placed the blame in the direction of former executives, with the responsible parties having since left.

"We believe that this is the tip of the iceberg," said the Attorney General of Connecticut George Jepsen, whose office is leading the case. "Price fixing in the generic industry is widespread and pervasive, and it involves many other drugs and a number of other companies."