Pharma stocks slump up to 5% on investigation by US' DoJ

NEW DELHI: Shares of pharmaceutical majors, including Sun Pharma, took a beating in Friday’s trade after media report suggested that prosecutors at the US Federal Reserve may bring charges of price collusion against a group of generic drugmakers before the end of the year.

A report by Bloomberg suggested that the US Department of Justice had started the investigation two years ago, and the list included a dozen drug companies such as Sun Pharma, Taro Pharma and Mylan.

Charges could come up as early as December, a Bloomberg report said.

At 9.30 am, Sun Pharma shares were trading 5.39 per cent lower at Rs 667 on BSE. Sun Pharma’s listed research arm, Sun Pharma Advanced Research Company (SPARC), slumped 4.40 per cent to Rs 311.

IPCA Labs dropped 4.15 per cent to Rs 560.35. Strides Shashun, Dr Reddy’s Labs and Aurobindo Pharma shed 3.99 per cent, 3.88 per cent and 3.64 per cent, respectively.

Overall, 57 of the 69 BSE Healthcare index stocks were trading lower. The index slipped 2.81 per cent to 15,362.72.

“Generic drugs are supposed to keep healthcare costs down. But the US government may claim that these companies worked together to keep prices higher instead of allowing market competition to set pricing,” the Bloomberg article noted.