Perrigo Says Investigators Searched Its Offices in Generic-Drug Probe

By Jonathan D. RockoffFeaturesDow Jones Newswires

Perrigo Co. said Tuesday its offices were searched by investigators conducting a federal probe of price collusion in the generic-drug industry.

The investigators executed search warrants at Perrigo's offices, according to the company, which didn't say when the offices were searched, which ones or what, if anything, was seized.

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"The company is taking this investigation seriously and is cooperating with the appropriate authorities," Perrigo said in a statement.

The price-fixing investigation by the U.S. Department of Justice has hung for months over the generic-drug industry.

Several companies have received subpoenas seeking information about drug pricing and communications with competitors, including Endo International PLC and Mylan NV. Also receiving subpoenas were Teva Pharmaceutical Industries Ltd. and Actavis, which Allergan PLC sold to Teva last year.

The execution of search warrants may suggest investigators are stepping up the probe, searching for evidence to support allegations of collusion.

Courts have set a high bar for price-collusion cases, requiring a written document or other evidence of an agreement among companies to follow each other on prices.

Which particular generic drugs investigators are examining, along with many other details of the investigation, are unclear.

Generic drugs, low-price copies of brand-name medicines that have lost patent protection, are supposed to help cut health-care spending.

But doctors, patients and hospitals have complained about the prices of certain generic drugs rising sharply in recent years.

Last year, the Government Accountability Office issued a report finding that prices of 300 out of 1,441 generic drugs rose 100% or more at least once between 2010 and 2015.

Dublin-based Perrigo is a leading seller of over-the-counter cough and cold remedies that retailers sell under their own labels, as well as generic drugs.

The company's shares have plunged since it rebuffed a takeover offer worth more than $26 billion from Mylan in 2015 and subsequently lowering earnings forecasts three times.

The company, whose chief financial officer left in February, has been trying to increase sales without the price increases and deals that analysts say had fueled the company's growth.

In February, activist investor Starboard Value LP put three representatives on Perrigo's board. Starboard has urged the company to consider selling its generic-drugs business and focus on its core business of over-the-counter remedies.

(END) Dow Jones Newswires

May 02, 2017 23:12 ET (03:12 GMT)