Merck and Eli Lilly investigated over pricing policies

Drug makers Merck and Eli Lilly are being investigated over their pricing methods.

The US Attorney's Office in Pennsylvania is looking into how the companies determined prices for certain drugs.

The investigation into Merck focuses on the pricing of an asthma medication.

Eli Lilly is being investigated over how it handled rebates for Medicaid - the US government funded insurance program for low income people.

In particular the probe is investigating deals Eli Lilly made with wholesalers for determining its average manufacturer price, which is used to calculate Medicaid rebates.

In a statement the Eli Lilly said, "We believe our accounting practices related to average manufacturer prices and the Medicaid drug rebate program are correct."

Merck said it was cooperating with the investigation.

Shares of Merck fell 1% on Friday, while shares of Eli Lilly were down 0.47%.

Senate investigation

Increased attention has fallen on drug pricing in the US, including a probe launched by the Senate Wednesday.

It is focused on pharmaceutical companies Valeant and Turing Pharmaceuticals.

Neither Merck nor Eli Lilly are included in the Senate probe.