Antitrust Lawsuit Targets 20 Generic Drug Manufacturers, 15 Industry Executives Over Medication Pricing

Twenty large generic drug companies, and 15 individuals are facing a lawsuit from a 44-state coalition led by the Attorney General of Connecticut, William Tong, for allegedly conspiring to inflate prices, reduce competition, and restrain trade for over 100 generic drugs. Some of the drug prices were artificially inflated as much as 1000%, according to the antitrust lawsuit.

The generic drugs involved accounted for billions in sales in the United States, with price increases affecting the health insurance market, taxpayer-funded health care programs, and patients who need prescription drugs.

The lawsuit claims generic drug giants Teva, Mylan, Pfizer, Sandoz, Actavis Holdco, Actavis Pharma, Apotex, Aurobindo , Breckenridge, Dr. Reddy’s Laboratories, Glenmark, Greenstone, Lannett Company, Lupin, Par Pharma, Taro, Upsher-Smith Laboratories, Wockhardt, and Zydus engaged in a systematic conspiracy to fix prices, allocate markets, and rig bids for over 100 generic drug products, ranging across all types of treatments.

The affected drugs include tablets, capsules, suspensions, creams, gels, ointments, and classes. Important and necessary prescription medications, such as statins, ace inhibitors, beta blockers, antibiotics, antidepressants, contraceptives, and nonsteroidal anti-inflammatory drugs that are used to treat basic infections, diabetes, cancer, epilepsy, multiple sclerosis, HIV, ADHD and other conditions.

The lawsuit filed in the US District Court for the District of Connecticut also names 15 senior executive defendants from sales, marketing, pricing, and operations departments, who are believed to be the heart of the alleged conspiracy.

The complaint highlights the network of industry executives, who used social gatherings, such as girls' nights, lunches, cocktail parties, and golf outings to meet and conduct conspiracies. The interconnected executives also communicated frequently with phone calls, emails, and text messages that detail their illegal agreements, to ensure each competitor was receiving “fair share”, that competitors were “playing nice in the sandbox,” and were acting like “responsible competitors. The communication describes how they colluded to illegally suppress competition and raise prices.

"We have hard evidence that shows the generic drug industry perpetrated a multi-billion dollar fraud on the American people,” said Tong, in a prepared statement. “We have emails, text messages, telephone records, and former company insiders that we believe will prove a multi-year conspiracy to fix prices and divide market share for huge numbers of generic drugs.”

This complaint is the second to be filed in an ongoing investigation that is being considered one of the largest cartel cases in United States history, following a previous complaint filed by the US District Court in the Eastern District of Pennsylvania filed in 2016. The lawsuit is pursuing damages, civil penalties to those involved, and actions to restore competition within the generic market.

“These are drugs that people in this country rely on every day for acute and chronic conditions and diseases from diabetes and cancer to depression and arthritis. We all wonder why our healthcare, and specifically the prices for generic prescription drugs, are so expensive in this country—this is a big reason why,” said Tong. “This investigation is still in its early stages. We will not stop until these companies and the individuals who orchestrated these schemes are held accountable.”

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Reference

Attorney General Tong Leads 44 State Coalition in Antitrust Lawsuit Against Teva Pharmaceuticals, 19 Other Generic Drug Manufacturers, 15 Individuals in Conspiracy to Fix Prices and Allocate Markets for More Than 100 Different Generic Drugs [news release]. Hartford, CT; May 12, 2019: State of Connecticut Attorney General. https://portal.ct.gov/AG/Press-Releases/2019-Press-Releases/TONG-LEADS-LAWSUIT-AGAINST-GENERIC-DRUG-MANUFACTURERS-IN-CONSPIRACY-TO-FIX-PRICES-FOR-OVER-100-DRUGS. Accessed May 14, 2019.