DETROIT–Pharmaceutical billionaire Barry Sherman, who killed himself in his Toronto home on Dec. 15, had already paid out $100 million to Canadian regulators to settle federal investigation into alleged price-fixing, his company disclosed in a recent regulatory filing.
“Recent rulings by the Competition Bureau of Canada and the Competition Tribunal demonstrate that Apotex has taken concrete steps to resolve the competition law claims,” wrote Kristina Wadsworth, of Blake Cassels & Graydon LLP, on behalf of the Shermans.
The $100 million in damages to be paid to the Competition Bureau of Canada comes on top of the $20 million which was paid in 2011 to settle allegations of price-fixing of certain drug ingredients produced by suppliers.
Apotex also agreed to cooperate with Canada’s Competition Bureau, said Barry Sherman’s brother Rakesh Sherman, who added he expected Canadian authorities to “be very generous” in its judgment in the case.
“I really feel that there will be more to come,” Rakesh Sherman said in a radio interview.
“I’ve often said that there were winners and losers in the government’s price-fixing investigation against Apotex,” Rakesh Sherman said. “Our side was that the company was innocent, not the company’s results.”
There is no indication that Sherman was named in any of the recent lawsuits, only that his company was deemed responsible for alleged wrongdoing, Rakesh Sherman said.
“Barry Sherman personally made no direct or indirect payments to employees or suppliers for the purpose of fixing prices,” he said.
Rakesh Sherman continued: “He wrote checks out to settle the Competition Bureau case. He was fined, he felt no financial liability and I feel vindicated.”
According to the American Chemistry Council, drug ingredients produced by Apotex and other companies are among the most commonly purchased ingredients in the pharmaceutical industry and affect prices paid by patients.
“It is important to note that the U.S. federal government is currently investigating these allegations in an effort to make sure patients across the U.S. benefit from competitive markets and a level playing field in access to innovative medicines,” the ACC said in a statement to Fox News.
Prior to his suicide, Sherman served as CEO of Apotex. The company, which he started, produces prescription drugs, as well as over-the-counter medicines such as balms, tonics and creams.
Sherman’s son, Darren Sherman, is the company’s vice president of research and development and CEO, according to the company’s website.
According to Canadian media reports, the federal Competition Bureau issued an arbitration order Nov. 7, saying the company unlawfully cooperated with other firms to fix prices of certain drugs containing insulin between December 2002 and August 2010.
According to court documents seen by the Globe and Mail, The Competition Bureau said Apotex “encouraged and encouraged its competitors to participate in price-fixing activities as part of a wide-ranging, years-long conspiracy to reduce, or eliminate the pricing competition between the parties in Canada.”
On Wednesday, the Atlanta Business Chronicle published an interview with an Atlanta pharmaceutical supply chain manager, Maru Mandeville, who said Sherman had informed him as recently as October he had launched an investigation into the organization.
“We got word, officially, from the company that there were some issues going on,” Mandeville told the Chronicle. “We heard the same thing but didn’t really know what that could have been at that point.”
Mandeville worked for an unnamed company involved in a legal battle with Apotex, the Chronicle reported.
“It went on from that point forward. We knew they were doing something,” Mandeville told the paper. “I think some people got sent warning letters.”
The Chronicle said Sherman’s death remained under investigation by Toronto police and the district attorney’s office in Toronto.
Apotex released a statement saying it disagreed with “some of the facts or conclusions of the arbitration order.”
“Barry Sherman and Apotex had a loving relationship over the last 50 years as both men worked together to create a formidable medical product company that was a lifeline for many,” the statement said.