Mylan Executive Allegedly Cut Price-Fixing Deals with Competitor

Mylan NV’s second-most senior executive allegedly told one of his generic-drug industry rivals that he would “play fair” and divide up market share for a key antibiotic, according to an unredacted version of a lawsuit accusing more than a dozen drugmakers of price-fixing.

Makers of generic drugs, including many of the biggest companies in the industry, are facing a civil complaint by more than 40 states, the District of Columbia and Puerto Rico that they used dinner parties, trade shows, phone calls and texts to agree to raise or maintain prices for specific drugs in tandem, or delineate each company’s market share.

An unredacted version of the complaint was published by the health news website Stat on Feb. 19. It offers new details on some of the alleged market-fixing, including by Mylan President Rajiv Malik.

According to the unredacted complaint, another drugmaker, Heritage Pharmaceuticals, entered the market for the antibiotic Doxy DR, or doxycycline DR, during or around July 2013. Mylan was the only maker of the drug at the time.

Jeffrey Glazer, then Heritage’s CEO, reached out to Mylan’s Malik by phone and told Malik that he intended to pursue two large customers which represented around 30 percent of the market for Doxy, but without aggressively competing with Mylan on price, according to the complaint. Malik agreed to give up the customers, citing a previous arrangement in which Heritage allowed Mylan to enter the market for a different drug without competition.

Mylan didn’t immediately respond to a request for comment about the allegations.

Malik has worked at Mylan since 2007 and became president in 2012. Previously, he worked at Novartis AG’s Sandoz and at Ranbaxy Laboratories Ltd. One of Mylan’s senior-most executives, he’s a regular speaker on quarterly earnings calls. The company, which has a legal address in the Netherlands and is run from Canonsburg, Pennsylvania, describes him on its website as the leader of “all global commercial and operational activities.”

Federal Investigation

The alleged price-fixing and market-allocation is at the center of the states’ probe as well as a parallel criminal investigation by the U.S. Justice Department’s antitrust division. The federal case has been quiet since January 2017, when Glazer and Jason Malek, another Heritage executive, pleaded guilty to conspiring to collude with other drugmakers.

The unredacted states’ complaint also includes new details about alleged conduct by Teva Pharmaceutical Industries Ltd. The complaint quotes a Teva representative as saying the company is “playing nice in the sandbox” and would agree to give up an unnamed customer to one its competitors, which is unidentified in the complaint.

A spokeswoman for Teva, Kelley Dougherty, said the company continues to “vigorously defend itself against these unfounded allegations.”

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