U.S. lawmakers press Heritage Pharma on high prices for antibiotic

[December 17, 2016]  By Sarah N. Lynch

WASHINGTON (Reuters) - Two U.S. lawmakers are questioning whether Heritage Pharmaceuticals misled them in response to a 2014 congressional inquiry about the rising price a common antibiotic, after 20 U.S. states this week accused the company of price fixing.

In a Dec. 16 letter to Heritage seen by Reuters, Maryland Democratic Representative Elijah Cummings and Vermont Independent Senator Bernie Sanders said they feared the company was "disingenuous at best" in October 2014 when it told them it had not seen any significant price increases for its doxycycline hyclate product.

"We are very concerned that you made these assertions to Congress on behalf of Heritage during the exact time period that its executives were engaged in a price fixing scheme to prevent competition from driving down prices of doxycycline hyclate," they wrote.

In response to Friday's letter, the company said it does not make the same version of doxycycline hyclate that the lawmakers asked about in 2014. Heritage makes a delayed release version, not the immediate release version that was the subject of the 2014 inquiry.

Heritage said it explained this to the lawmakers in its 2014 response.

The letter to Heritage comes after criminal and civil charges were filed by the Justice Department and 20 states in connection with an alleged price fixing scheme involving doxycycline hyclate and glyburide, a diabetes drug.

On Wednesday, the Justice Department criminally charged Heritage's former Chief Executive Officer Jeffrey Glazer and former Heritage Vice President of Commercial Operations Jason Malek, accusing them of colluding with other generic manufacturers in schemes that entailed allocating market share and conspiring to raise prices.

The next day, 20 states filed a parallel civil lawsuit against Heritage, along with Mylan NV, Teva Pharmaceuticals, Mayne Pharma Group, Citron Pharma and Aurobindo Pharma Ltd., saying they colluded to fix prices.

The lawsuit characterized Heritage as the "ringleader," with Glazer and Malek overseeing and running the scheme.

Mylan and Teva have previously denied the states' civil charges.

Sanders and Cummings launched a congressional inquiry into rising generic drug prices on Oct. 2, 2014, including the price of doxycycline hyclate.

As part of that, they sent a letter to Glazer while he was still CEO of Heritage to inquire about the prices.

Gary Ruckelshaus, who was then Heritage's outside counsel and now serves as vice president and general counsel, responded later that month and said Heritage "has not seen any significant price increases" for the drug.

(Reporting by Sarah N. Lynch)

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