Former Heritage Pharmaceuticals CEO Jeffrey Glazer and ex-president Jason Malek were hit yesterday with the 1st criminal charges from a 2-year federal investigation in an ongoing generic drug pricing case. The 2 former executives were charged by federal authorities with price collusion for doxycycline hyclate, a widely used antibiotic, and a diabetes therapy called glyburide from 2013 and 2015.
Other drug makers have reportedly received subpoenas as a part of the U.S. Justice Dept. probe. Bloomberg News reported that Mylan (NSDQ:MYL), Teva Pharmaceuticals (NYSE:TEVA), and Endo International’s Par subsidiary are among the companies being investigated by federal authorities for co-conspirating to fix the market for generic drugs.
Pharmaceutical companies have been under fire this year for their pricing strategies. Mylan has endured criticism for months following reports that it jacked the price of its EpiPen by 500% since acquiring the epinephrine auto-injector from Merck (NYSE:MRK) in 2007. In early October, the company agreed to pay $465 million to settle claims that it underpaid Medicaid for its EpiPen auto-injector by misclassifying the device as a generic.
Heritage filed a racketeering lawsuit against Glazer and Malek last November, accusing the pair of a “long-running criminal conspiracy that severely damaged Heritage.” The Eatontown, N.J.-based company alleged that the 2 executives redirected millions of dollars of Heritage sales to dummy corporations like Dorado Pharma from 2012 to 2015. The 2 were fired in August this year.
According to court documents, “Glazer and Malek looted tens of millions of dollars from Heritage by misappropriating its business opportunities, fraudulently obtaining compensation for themselves, and embezzling its intellectual property.”
The company is cooperating with the U.S. Justice Dept. investigation and is “deeply disappointed by the misconduct and are committed to ensuring it does not happen again,” a spokeswoman told Stat News.
