MYL Mylan NV

Shares of generic-drug makers declined Thursday on a report that U.S. prosecutors were conducting a criminal investigation of possible price collusion in the industry.

The report by Bloomberg News on Thursday sent shares of Endo International PLC down 20%, while Teva Pharmaceutical Industries Ltd. declined 9.5%, and Mylan NV dropped 7%, among other stocks. The Bloomberg story said the first charges from the probe of whether companies colluded to raise prices could be brought by year's end.

A Justice Department spokesman declined to comment.

Wells Fargo analyst David Maris said in a research note that the news "could add a severe overhang to the sector that may last well past the presidential election and into the new year."

Though generic drugs generally cost less than brand-name drugs, prices for some have risen sharply in recent years. The Government Accountability Office in August issued a report finding that more than 300 of 1,441 established generic drugs analyzed had at least one extraordinary price increase of 100% or more between 2010 and 2015.

The U.S. Department of Justice has sent subpoenas to several manufacturers of generic drugs and to some individual executives, seeking information about product pricing and "communications with competitors," according to the companies' filings with the Securities and Exchange Commission over the past two years.

The companies receiving such subpoenas include Teva, Mylan, Dr. Reddy's Laboratories, Taro Pharmaceuticals, Endo and Actavis, which Allergan PLC recently sold to Teva. Several companies said the DOJ's antitrust division sent the subpoenas and that they were cooperating.

A Mylan spokeswoman declined to comment beyond the company's disclosure in an SEC filing that it had received a Justice Department subpoena related to its antibiotic doxycycline, and that Mylan is cooperating.

Teva said in its SEC filing it's cooperating with the subpoena.

A Taro spokesman said the company is cooperating with the Justice Department in responding to its subpoena, and can't comment on the details of the pending investigation.

Spokesmen for other generic-drug makers that have disclosed subpoenas couldn't immediately be reached.

Write to Peter Loftus at peter.loftus@wsj.com

(END) Dow Jones Newswires

November 03, 2016 17:55 ET (21:55 GMT)

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