MUMBAI (Reuters) - Indian drugmaker Aurobindo Pharma Ltd’s shares hit their lowest in more than nine months on Friday after the company was named in a lawsuit alleging it colluded with other drugmakers to fix prices of two commonly used drugs in the United States.
About 44 percent of Aurobindo’s sales come from its U.S. business.
The lawsuit, filed in the U.S. District Court for the District of Connecticut by 20 U.S. states, also named Heritage Pharmaceuticals Inc, a company owned by India’s Emcure Pharma Ltd, as a “ring leader” of the price manipulation.
The suit pertained to commonly-used antibiotic doxycycline hyclate, and glyburide, an older drug used to treat diabetes.
Aurobindo said it was aware of the suit and would comply with authorities.
The company’s U.S. subsidiary sold about $1.1 million of glyburide in 2016 as per consultancy IMS Health’s data, Aurobindo said in a statement, adding that the impact was “not material” to the company.
Others named in the suit include the world’s largest generic drugs maker Teva Pharmaceuticals, Mylan NV, Citron Pharma LLC, and Australia’s Mayne Pharma.
The suit comes after months of increasing scrutiny over generic drug prices in the United States, the world’s largest healthcare market. Drug pricing probes are ongoing at both the state and federal level in the country.
Two of India’s largest drugmakers - Sun Pharmaceutical Industries Ltd and Dr Reddy’s Laboratories Ltd - have previously disclosed having received subpoenas under a U.S. Department of Justice investigation into drug price rises by generic drugmakers. Aurobindo said it had been issued a subpoena from DoJ in March, and that no further information had been sought since.
Shares in Sun Pharma fell as much as 3 percent, while those in Dr Reddy’s were flat in Mumbai. Aurobindo shares bounced back from early losses and were up 0.2 percent at 0802 GMT.
Reporting by Zeba Siddiqui in Mumbai; Editing by Biju Dwarakanath and Subhranshu Sahu