Allergan no longer owns Actavis, having unloaded the generics unit to Teva. That hasn't kept the drugmaker from facing potential fallout from shareholders who say Allergan’s share price has been stung by questionable pricing practices when it did.
Former employee Andrew Ormond launched a class action suit (PDF) against the drugmaker, arguing its shares were “artificially inflated” between Feb. 25, 2014, and Nov. 2, 2016. Several Allergan press releases and filings from the company praised its own performance during that time, but the lawsuit claims that behind the scenes, things weren’t all that genial.
Allergan “and several of its pharmaceutical industry peers colluded to fix generic drug prices in violation of federal antitrust laws,” according to the class action. That put the company “at risk of criminal prosecution and civil and criminal penalties,” factors that investors couldn't assess, according to the suit.
Now, the plaintiffs want to recover their losses on the stock and be reimbursed with proceeds they would have received if their “assets had been invested prudently.” Ormond’s suit figures there are “tens of thousands” of Allergan’s shareholders who were affected during the period.
Allergan did not respond to a request for comment by press time.
Allergan disclosed it received a subpoena from the Department of Justice about generic pricing back in August 2015, ahead of concluding its $40.5 billion deal to unload Actavis to Israel’s Teva.
Shares of a number of companies took a hit late last year when Bloomberg reported that DOJ officials were prepping charges in a wide-ranging probe of generics pricing collusion. The news service indicated the feds were looking at about a dozen companies. Among the companies reported to be involved in the probe were Mylan, Teva and Actavis.
No charges have been filed against any of those companies, but authorities have gone after two ex-execs at New Jersey’s Heritage Pharma. The Heritage charging documents mention two "co-conspirators"—identified as Company A and Company B—that allegedly colluded with the small generics firm to fix prices.