DOJ Subpoenas Allergan Over Generic Pricing

August 13, 2015

The Department of Justice is looking into Allergan’s pricing of certain generic drugs as part of a larger federal probe into rising generic prices.

DOJ subpoenaed the Irish drugmaker in late June seeking marketing and pricing information, as well as communications Allergan had with competitors, a SEC filing reveals.

It’s too early to determine the significance, but the request for information about competitors suggests DOJ is looking into whether drugmakers colluded to raise generic prices, S&P Capital IQ analyst Jeffery Loo says. The companies could face fines if DOJ finds that was the case.

Allergan is the latest and largest drugmaker to receive a subpoena from DOJ. In November, Lannett and Impax Labs disclosed they’d been subpoenaed regarding communications they had with competitors over the sale of generics.

Earlier this year, the HHS inspector general launched an investigation to determine the extent to which the quarterly average manufacturer prices for the top 200 generic drugs, as ranked by Medicaid reimbursement, overshot the specified statutory inflation rate. The inquiry followed prodding by lawmakers over 10 drugs that had experienced significant price hikes in the past two years. — Jonathon Shacat