Pharma Companies Shares Tank As Feds Investigate Opioid Crisis
Pharmaceutical companies are in trouble over their role in fueling the opioid crisis facing the U.S.
What Happened
Federal authorities have launched a criminal investigation against the companies — using the same laws used to prosecute drug dealers, the Wall Street Journal reported on Tuesday.
The pharmaceutical companies already face a plethora of lawsuits filed by various state and city governments across the country.
If this investigation leads to formal charges, it would be the largest prosecution facing these companies, according to the Wall Street Journal.
The authorities are looking into whether these companies violated the federal drug policy established by the Controlled Substances Act.
Companies Involved
Six pharma companies including Johnson & Johnson (NYSE: JNJ), Mallinckrodt PLC (NYSE: MNK), Teva Pharmaceutical Industries Ltd (NYSE: TEVA), Amneal Pharmaceuticals Inc. (NYSE: AMRX), AmerisourceBergen Corporation (NYSE: ABC), and McKesson Corporation (NYSE: MCK) have received subpoenas related to the federal probe. The probe is in the early stages, and more companies could receive subpoenas in the coming months, people close to the matter told the Wall Street Journal.
Spokespersons from Johnson & Johnson and Teva confirmed to the Wall Street Journal that they received subpoenas but expressed confidence in their compliance with the law.
Opioid Crisis
The opioid epidemic, which began in the late 1990s, has claimed more than 47,600 lives, according to the data from the Department of Health and Human Services, with nearly 130 people die every day from a drug overdose.
The epidemic is showing no signs of slowing down as nearly 10.3 million were reported to have misused prescription opioids in 2018 alone, according to the federal data.
Price Action
The six pharma companies allegedly involved in the federal investigation saw their shares going down at close on Tuesday.
Mallinckrodt closed 3.88% lower at $3.47.
Teva closed 7.93% lower at $9.87.
Johnson & Johnson closed 0.0073% lower at $137.17.
Amneal closed 10.06% lower at $3.04.
AmerisourceBergen closed 3.08% lower at $87.85.
McKesson closed 4.87% lower at $145.80.
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