Generic drugmaker turns price-jacking argument against competitor


Elected officials have been publicly bludgeoning drugmakers they say have used monopoly power to jack up drug prices. Meanwhile, in the background, a generic drugmaker is turning the argument against a competitor, accusing it of pulling a fast one on the FDA to win approval of a drug and setting itself and its partners up to control the market.

In a recently disclosed citizen petition, Virtus Pharmaceuticals accused competitor Lehigh Valley Technologies of misleading the FDA in winning approved generic status for a couple of versions of oral potassium chloride, a drug sold for decades as an unapproved generic, and used by millions to treat hypokalemia. The petition alleges Lehigh avoided paying more than $2 million in user fees by using front companies to get small business status. Virtus says Lehigh then "apparently sold these rights to Endo Global Ventures for $47.7 million."

Officials at Allentown, PA-based Lehigh did not respond to a request for comment. A spokesperson for Endo said the company has a policy of not commenting on ongoing litigation.  


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The accusation comes as the FDA is clearing the market of competing “unapproved generics” of the drug which has been sold for 70 years. If it does, Tampa, FL-based Virtus says “patients can expect shortage and higher prices.” In its citizen petition to the FDA, it asks that the agency to investigate the matter, “institute proceedings to remove the relevant NDAs” and “refrain from taking any action against other potassium chloride oral solution drug products until this matter has been resolved.”

But the wholesale price of potassium chloride is on the rise. Info from First Data Bank shows that Endo has more than doubled the price of the drug since getting control of it, to $236.93 in June of this year from $121.50 in May 2015.

Endo this year lowered its earnings expectations and is laying off employees to cut costs, but according to a Morgan Stanley analyst report, it has told investors it expects big upside from liquid potassium chloride sales as makers of unapproved versions of the drug heed the FDA request to exit the market now that there is an approved generic. Morgan Stanley analysts say that based on IMS Health data, the liquid potassium chloride market is worth about $162 million in annual sales and that Endo controls about 80% of the market.

Drugmakers of both branded and generic drugs that have jumped up prices have come in for a lot of criticism in this passing year. Most recently, Mylan CEO Heather Bresch took a public thrashing from U.S. House members who had harsh words about the company raising the price of its EpiPen by 400% over 7 years. Bresch defended the drug’s price as fair and blamed insurers and payers for raising consumers’ costs with higher copays.

- access the Citizen Petition here

Related Articles:
Lawmakers smack Mylan CEO Bresch for pay, plane and pricing at EpiPen hearing
Endo to slash 740 jobs at AL, NC sites

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