US states sue 26 drugmakers over alleged price fixing
A coalition of attorneys general have taken 26 drugmakers, including Pfizer, Sandoz and Mylan, to court over the alleged price-fixing of topical generic drugs.
The case, filed at the US District Court for the District of Connecticut yesterday, June 10, is the third lawsuit stemming from an ongoing antitrust investigation into a “overarching” conspiracy by generic drugmakers to artificially inflate prices and reduce competition.
Connecticut attorney general William Tong led the coalition of 51 states and territories in the suit, which focuses on 80 topical generic drugs, including creams, gels, lotions, ointments, shampoos, and solutions used to treat a variety of skin conditions, pain, and allergies.
“These generic drug manufacturers perpetrated a multibillion-dollar fraud on the American public so systemic that it has touched nearly every single consumer of topical products,” said Tong.
He added: “Through phone calls, text messages, emails, corporate conventions, and cozy dinner parties, generic pharmaceutical executives were in constant communication, colluding to fix prices and restrain competition as though it were a standard course of business. But they knew what they were doing was wrong, and they took steps to evade accountability, using code words and warning each other to avoid email and detection.”
According to Tong, the attorneys general have evidence from “several cooperating witnesses at the core of the conspiracy”, including a document database of more than 20 million documents, and a phone records database containing millions of call detail records and contact information for over 600 sales and pricing individuals in the generics industry.
The suit accused the drugmakers of conspiring to rig the market between 2009 and 2016, and claimed that the size and frequency of price increases grew exponentially in 2013 and 2014.
“During that time period, the prices of hundreds of generic drugs – including many at issue in this complaint – skyrocketed without explanation, sparking outrage from politicians, payers, and consumers across the country whose costs have doubled, tripled, or even increased by 1,000% or more,” said the clain.
Speaking to Reuters, Novartis (which owns Sandoz) said that the instances of misconduct contained in the lawsuit had already been covered in its $195 million settlement with the US Department of Justice in March.
A spokesperson for Mylan said: “Our review of the new complaint, which only includes allegations against Mylan with respect to three of the 80 pharmaceutical products named, changes nothing in regard to all of our previous statements. We have thoroughly investigated allegations made against our company and employees, and have not found any evidence of price fixing.”
Pfizer added that, as it had previously stated in response to an earlier complaint, it does not believe the company or its colleagues participated in unlawful conduct.
“The claims and allegations in the states’ most recent complaint do not change that belief,” said Pfizer’s spokesperson.
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