Dr. Reddy's drug prices in crosshairs of two states

Generic drugmaker Dr. Reddy's Laboratories, which already has had to defend its drug pricing to a couple of members of Congress, is now being called to account by the attorneys general of both Texas and California.

In a SEC filing, the Indian drugmaker disclosed that in November the Texas AG asked it for a decade's worth of data on drug pricing, but then agreed to take a sampling from a single year. At about the same time, the attorney general in California asked for info on its pricing of 15 drugs. California has taken other steps aimed at drug prices with a state assembly member just now proposing a law that would require drugmakers to hand over info on what their R&D and production costs are for expensive meds.

"We have communicated with the California AG, and we are working with them in tandem with the Texas AG in order to avoid duplication of efforts in providing the voluminous data requested," Dr. Reddy's said in the filing made last week.

A company official confirmed the actions, DNA reports, but nothing else. "At this point, we do not have any further comment as the matter is still work in progress," the Dr. Reddy's official told the Press Trust of India.

States often participate in settlements worked out by federal authorities in which drugmakers have been accused of drug marketing abuses like pushing products for unapproved uses, a common practice in years past. Some states have been more aggressive in going it alone.

Texas Attorney General Greg Abbott last year sued AstraZeneca's ($AZN) for fraud, saying that AstraZeneca sales reps misled doctors and state Medicaid officials about Seroquel's side effects, paid kickbacks to two influential state decision-makers, and promoted the powerful antipsychotic for off-label uses. The state has reportedly also taken a look at Medicaid pricing by Ranbaxy Laboratories. That Indian drugmaker last year set aside about $40 million for "ongoing settlement discussions," which sources indicated were tied to a probe in the state.

There is federal interest in rising generic drug costs as well. Dr. Reddy's is among 14 drugmakers that have been asked for pricing data from a couple of members of Congress. In Dr. Reddy's case, it was asked for data on seizure drug divalproex sodium ER and cholesterol drug pravastatin sodium. In the SEC filing, the drugmaker said it informed the lawmakers that it had not raised prices for the drugs since their launch and no longer sells pravastatin in the U.S.

- here's the SEC filing
- read more from DNA

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