March, 2003 -- The SEC and the FTC are both investigating Levoxyl manufacturer King Pharmaceuticals over a variety of pricing and business practices.

The SEC is investigating King Pharmaceuticals’ pricing and rebate practices. In addition to the levothyroxine thyroid hormone replacement drug Levoxyl, King recently acquired the rights to Sonata, a popular sleeping aid.

The documents requested by the SEC include information on the price King set on drugs that were sold to the Medicaid program in 1999, sales made to several companies in 1999 and 2000, and rebates it gave on its top-seller, the hypertension drug Altace. King has said that the government also requested the company’s "best price" lists – which summarize the lowest prices King offers to any distributor or other purchaser of its drugs. These prices help determine the prices the government pays drug manufacturers through Medicaid.

At the same time, the FTC is currently investigating whether King used anti-competitive practices to acquire. US. rights to the muscle relaxant Skelaxin from Elan Corp.

On Jan. 30 King agreed to acquire the U.S. rights to Skelaxin and sleep aid Sonata from Elan, an Irish drugmaker, for $850 million. The transaction is still pending.

These investigations also come at a time when King faces the potential that Levoxyl, its second-biggest selling product, will face cheaper generic competition sometime in the near future, as the FDA evaluates potential generic equivalents for the drug.