Sergeants Sound Siren on Eczema Drug Hikes

MANHATTAN (CN) — In the latest clampdown on pharmaceutical price hikes, a police sergeant's union collared the makers of the eczema ointment Clobetasol to bring the companies downtown to federal court.

On Sept. 8, filings released by the Securities and Exchange Commission revealed that Taro Pharmaceuticals and two of their senior officers received grand jury subpoenas from the Department of Justice's antitrust division.

On Thursday, the New York-based Sergeants Benevolent Association Health & Well Being Fund — representing 4,700 active and 7,600 retired NYPD sergeants — filed a class-action lawsuit against Taro and five other corporations.

Clobetasol, a drug prescribed for eczema, dermatitis, psoriasis and vitiligo, is among the four generic drugs that experienced the largest price increases across the U.S. pharmaceutical industry in the past two years, according to the sergeants' 33-page complaint.

Between June and September 2014, Clobetasol's prices shot up roughly 1,140 percent, and the price tag went up again by 950 percent during the yearlong window between August 2014 and 2015, the sergeants say.

"Whereas, in 2013, a 60-gram tube of Clobetasol cream cost $15.60, as of 2015, the cost was nearly $250," the complaint states.

The sergeants say that these dramatic hikes followed a meeting between the top manufacturers of the drug: Hi-Tech Permacal Co., Perrigo Company, Sandoz, Taro USA, and Wockhardt USA.

Fougera, which acquired Sandoz in 2013, is the lead defendant in the complaint.

The lawsuit notes that these hikes happened "at a time during which congress and regulators are focusing intense scrutiny on generic manufacturers' anticompetitive pricing practices," scrutiny that continues to grow in public backlash against so-called "Pharma Bro" Martin Shkreli and the makers of EpiPen, the life-saving allergy injections.

Shkreli currently faces possible prison time, not for jacking up the price of AIDS drug Daraprim, but for charges that he rolled investors into an $11 million securities fraud. Those allegations continue to await trial in Brooklyn.

The sergeants say the Clobetasol hikes mirror a rash of similar behavior by pharmaceutical companies. The Office of the Inspector General, the internal watchdog for the U.S. Department of Health and Human Services, found that price increases in 22 percent of the top 200 generic drugs exceeded the cost of inflation.

Represented by attorney Peter Safirstein, the sergeants union wants damages against Clobetasol's makers to be tripled under the Sherman Act, the law that governs anti-competitive business practices.

Taro Pharmaceuticals did not immediately respond to an emailed request for comment.

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