The prices of Perrigo Company plc Ordinary Shares (NYSE:PRGO) drugs used in skin treatments is being examined by law enforcement authorities. This is part of an investigation which is being carried out to unearth a possible price-fixing scheme by manufacturers of generic drugs. It is understood that the U.S. Department of Justice has been investigating generic drugs’ pricing for a period of over two years. The number of pharmaceutical firms that are on the radar are about a dozen.

Court documents

This came to the surface following the filing of documents in court. In civil lawsuits alleging that the drug firms overcharged consumers, prosecutors requested that discovery be put on hold temporarily to prevent the investigation from being compromised.

“There are significant overlaps between the companies and drugs that are being investigated criminally and the defendants and drugs identified in plaintiffs’ amended complaints,” the U.S. Department of Justice said.

Some of the drugs that are alleged to have been overpriced include clobetasol, desonide and fluocinonide. They are used to treat disorders of the skin such as psoriasis and eczema.

Former executives

The price-fixing investigation has only grown clearer in recent days as more details emerge. Around a dozen pharmaceutical firms have revealed that they received subpoenas. In the recent past, Heritage Pharmaceuticals’ former executives have pleaded guilty to price collusion charges. With the former executives cooperating with the law enforcers, it is understood that other executives at Heritage Pharmaceuticals and other drug firms may face similar charges of price fixing.

Heritage Pharmaceuticals has, however, in a separate lawsuit, sued its former employees accusing them of stealing from the company amounts totaling to millions over a period of seven years.

Besides the alleged price fixing of skin disorder drugs, pharmaceutical firms are also grappling with price collusion with regards to drugs used to treat diabetes, glyburide and an antibiotic, doxycycline hyclate. The lawsuit has been filed by State governments. Initially, 20 states were involved but the number has since then grown to 40 states.

In Friday’s trading session, shares of Perrigo Company Plc edged downwards by 3.71% to close the day at $72.76.