US insurer names Dr Reddy's, dozens of other drug firms in price fixing row

The complaint involves 30 generic drugs, 42 companies; DRL denies wrongdoing, says will vigorously defend itself

Dr Reddy's Laboratories Limited is among the dozens of companies named in a price-fixing complaint filed by United Healthcare Services Inc and a host of other firms in the US last month.

Dr Reddy's disclosed this information in a latest SEC filing while denying any of wrongdoing on its part and vowing to vigorously defend itself against these claims.

According to the filing, on January 16, United Healthcare Services Inc filed a complaint against Dr Reddy's and 42 other defendants, involving a total of 30 generic drugs, alleging an 'overarching' price fixing conspiracy to rig bids and allocate customers with respect to 30 drugs.

United Healthcare Services is an American firm that offers health insurance policies and products under individual and group plans.

This company alleged that it had suffered 'several billion dollars' worth of economic damages traceable to unlawful price inflation by drug companies named in the lawsuit.

The Hyderabad-based drug major was specifically named with respect to four drugs: divalproex ER, meprobamate, pravastatin and zoledronic acid. "Plaintiffs also allege that Dr Reddy's (as well as other manufacturers named), were part of a larger conspiracy as to all of the drugs named in the complaints," the company stated in its filing.

The complaint alleges violations of Section 1 of the Sherman Anti-Trust Act, of the antitrust laws in Minnesota and 29 other states and of consumer protection statutes in Minnesota and 16 other states. It claims unjust enrichment and seeks injunctive relief, recovery of treble damages, punitive damages, attorney's fees and costs.

This isn't the first time that Dr Reddy's and other Indian generic pharma companies have faced legal cases involving the price fixing allegations in the US.

In November 2017, attorney generals of 46 states in that country had led an anti-trust investigations into charges of cartelisation involving several drug firms, including Sun Pharma and Dr Reddy's. The status of these investigations and subsequent lawsuits was not clear.

Meanwhile Dr Reddy's also disclosed that it was named in at least four other complaints filed more or less on similar grounds against many companies. The Kroger Co, Albertsons Companies, LLC, Butt Grocery Company, LP filed claims against Dr Reddy's and 33 others, making similar allegations of price fixing with respect to 30 generic drugs, while Dr Reddy's name was referred to the same four drugs mentioned above.

Except for Zoledronic acid injection, which was launched as recently as in 2017, the other three generic drugs of Dr Reddy's have been in the US market from 2009 and 2013 onwards and any adverse legal outcome in these anti-trust cases would make the company liable to pay substantial penalties.