Drug Firm Is Facing Probe of Pricing

Watson Pharmaceuticals Inc., the world’s third-biggest maker of generic drugs, said Thursday that it had received a subpoena from California’s attorney general seeking records on the company’s pricing for medicines.

The company has not yet responded to the subpoena, which was delivered in August, according to a filing with the Securities and Exchange Commission. Attempts to reach a Watson spokesman were not successful.

Watson, which is headquartered in Corona, is among 26 drug makers that received requests for information from a congressional committee investigating prices and billing of the government’s Medicaid health plan for the poor. The company also is one of 13 generic drug makers being sued by Massachusetts Atty. Gen. Thomas Reilly, who alleges that they defrauded the state’s Medicaid program by inflating drug prices.

“Every major generic pharmaceutical company’s receiving the same subpoena, and when the filings start hitting we’ll see more of them,” said Ian Sanderson, an analyst at SG Cowen Securities Corp. “We’ve been through the worst of the headline risk on this issue, and the fundamental risk to the company is minimal.”

Shares of Watson rose 29 cents to $42.61 in New York Stock Exchange composite trading. They have risen 51% since the beginning of the year.