May 3, 2017
By Alex Keown, BioSpace.com Breaking News Staff
ALLEGAN, Mich. – Shares of Perrigo are down more than 5 percent this morning following the company’s disclosure that federal agents with the U.S. Department of Justice descended on the company’s corporate office in a drug-pricing investigation.
On Tuesday, generic drugmaker Perrigo said search warrants were executed at their offices regarding an ongoing DOJ investigation into drug pricing in the pharmaceutical industry. Perrigo said it is cooperating with the investigation, which is being conducted by the DOJ Antitrust Division. In its brief announcement that did not provide any details beyond agents came to its offices, Perrigo said the Antitrust Division is looking into industry-wide pricing practices.
Perrigo’s U.S. headquarters is in Michigan, but it does maintain a corporate base in Dublin, Ireland for tax purposes.
The high price of prescription drugs has been a concern for consumers and politicians for a long time. Congress has held numerous investigations on drug pricing, looking at companies like Valeant Pharmaceuticals , Mylan , Turing and more. U.S. Sen. Bernie Sanders and President Donald Trump have both been critics of drug pricing as well.
The Department of Justice has also been looking into drug pricing practices, particularly investigating whether or not generic companies have colluded to “fix” prices or prevent a competitive playing field in the industry. In December, the DOJ charged the former president and chief executive officer of Heritage Pharmaceuticals. The government charged former CEO Jeffrey Glazer and former company president Jason Malek with conspiring to fix prices, rig bids and allocate customers for an antibiotic, doxycycline hyclate, a well as the diabetes medicine dlyburide.
After the charges were announced, Deputy Assistant Attorney General Brent Snyder of the Justice Department’s Antitrust Division said in a statement that the executives entered into an unlawful agreement to fix prices and enrich themselves at the expense of “sick and vulnerable individuals” who use generic treatments. He said it was important to ensure that generic drugmakers “compete vigorously to provide these essential products at a price set by the market, not by collusion.”
The Department of Justice has not provided information on what it was seeking from Perrigo.
In February, Perrigo announced it was terminating 750 employees and divesting its multiple sclerosis drug Tysabri as part of a strategic plan to improve operations. The company is looking to streamline operations by mid-2018 in order to save about $130 million in expenses.
Shares of Perrigo are trading at $71.80 as of 9:41 a.m.
