US regulators are investigating allegations of price-fixing by a number of major pharmaceutical firms, which could result in fines in excess of $1 billion dollars, according to a newspaper report.
According to Reuters, The Wall Street Journal has published an article, which states that while about a half dozen unnamed drugmakers have already settled charges during the last two years, at least three others – Serono, Abbott Laboratories and King Pharmaceuticals are under investigation. Specifically the article claims that a Justice Department source told the newspaper that 150 probes are being conducted, involving around 500 drugs.
It is claimed that officials involved in the investigation have told the WSJ that it is focused on allegations that drug companies frauded state and federal health-care programmes by inflating prices, offering illegal rebates to distributors or marketing medicines for unapproved indications.
The companies cited in the article have made no official comment but the newspaper says that Serono, Abbott and King told it they are cooperating with the investigations. The WSJ adds that the latter firm has set aside $130 million for possible civil penalties and fines and a King spokesman said the company hopes to strike a “comprehensive settlement” soon with the Justice Department and other regulators.
The article concludes by noting that the investigations come months before the implementation of the Medicare prescription drug programme in 2006, which will dramatically escalate government spending on pharmaceuticals.