PHILADELPHIA — He was dubbed “the citizen pharma CEO” by Forbes. His personal fortune was valued at $3.2 billion.
But on Thursday, investors reacted to news that Barry Sherman, an Apotex Inc. chief executive who gave away millions to charities and said he was already breaking the law in the United States, had died after a battle with cancer. The company’s shares declined 19 percent, dropping $18.75 to $79.92 in Toronto.
The decision by Canada’s largest pharmaceutical company to waive its U.S. pricing policies — so American companies would have to pay for three-fifths of their products at a Canadian government-monitored price — has spurred widespread reaction in the U.S. The firm also announced a $100 million donation to Harvard.
But the move has been criticized by politicians, including Rep. Lloyd Doggett, D-Texas, who called the donation to Harvard “empty rhetoric.”
Doggett, who represents a Texas border district and sits on the Energy and Commerce Committee, said he plans to “suspend any attempts to address this situation while we look into these actions,” according to a letter on Wednesday to Brenda Shaffer, chairwoman of the committee’s Health subcommittee.
Apotex, founded by Sherman in 1964, is a Canadian firm that supplies drugs to pharmacies and hospital chains in North America. It is the company he founded with his brother Eugene in 1966 and developed into a leader in drugs to treat high blood pressure, allergies and other conditions. In the 1990s, he helped turn a struggling London Drugs to a successful chain by serving on its board. In 1999, he took the company public.
But he was dogged by allegations of price-fixing with other firms, including by the U.S. Justice Department.
In 2007, Sherman and his brother agreed to plead guilty to one count of conspiracy to fix the price of drugs. They were ordered to pay a $22.9 million fine and were banned from any role in the company’s day-to-day operations.
In recent years, the company has taken foreign suppliers to court, alleging they made illegal off-shoring deals.
For example, the company claimed in a 2010 lawsuit that the makers of Cipro, which is used to treat many of the world’s respiratory diseases, had agreed to sell them generic versions of the drug under their agreements with another generic company.
In the wake of that lawsuit, the chief executive of another pharmaceutical manufacturer, Sandoz, agreed to pay $38 million to resolve similar charges.
The company set up an anti-trust division in 2000. The office then filed three lawsuits, covering about a dozen drugs, including anti-inflammatory Lortab. The cases were settled in 2005 for $129 million.
Since the Sherman brothers’ guilty plea, Apotex has been under scrutiny by regulators for the prices charged for drugs it sells in the United States, in response to a public outcry about prices.
Sherman, known for his philanthropy, established a foundation that has given $9 million in grants to scientific institutions in the United States, including the University of Pennsylvania and the Harvard Medical School.
He was active in politics in Canada, serving as president of the country’s executive committee in the House of Commons, while also donating thousands of dollars to its governing Liberal Party. He was one of the founders of the Toronto Institute for Policy Alternatives, which uses legal research to promote better health care, and to examine the meaning of wealth in the society.