44 states accuse big pharma of price fixing generics market
44 US states have filed a joint complaint against 20 drug companies, alleging they engaged in illegal conspiracies to “manipulate prices, reduce competition” and restrain trade for more than 100 generic drugs.
The complaint, which was filed on Friday, May 10 at the US District Court for the District of Connecticut, names Teva Pharmaceuticals, Sandoz, Mylan and Pfizer among the defendants.
According to the complaint, the generic drug industry engaged in a long history of discreet agreements, in which generic manufacturers agreed not to compete with each other and to instead settle for a “fair share” of the market.
The states said this agreement avoided competition among manufacturers that would normally have resulted in “significant price erosion and great savings to the ultimate consumer”.
Rather than enter a particular generic drug market by competing on price in order to gain market share, “competitors in the generic drug industry would systematically and routinely communicate with one another directly, divvy up customers to create an artificial equilibrium in the market, and then maintain anti-competitively high prices”.
The complaint said the situation worsened in 2012.
“Apparently unsatisfied with the status quo of ‘fair share’ and the mere avoidance of price erosion, Teva and its co-conspirators embarked on one of the most egregious and damaging price-fixing conspiracies in the history of the United States,” the complaint said.
It alleged that the companies colluded to significantly raise prices on 86 medicines between July 2013 and January 2015. In some cases, the increases were more than 1,000%, the states said.
It said this resulted in “billions of dollars of harm to the national economy over a period of several years” and had a significant negative impact on national health.
The drugs included tablets, capsules, suspensions and antibiotics. They treated a range of diseases from basic infections to diabetes, cancer, epilepsy, multiple sclerosis and HIV.
The lawsuit seeks damages, civil penalties and actions by the court to restore competition to the generic drug market.
“Generic drugs were one of the few ‘bargains’ in the United States healthcare system,” the lawsuit said.
Attorney general William Tong said the state had evidence to show the generic drug industry “perpetrated a multi-billion dollar fraud” on the American people.
Tong said: “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.”
“We will not stop until these companies and the individuals who orchestrated these schemes are held accountable,” he added.
In a statement to LSIPR, Pfizer said: “The Company has cooperated with the Connecticut attorney general since it was contacted over a year ago. We do not believe the company or our colleagues participated in unlawful conduct and deny any wrongdoing.
"Greenstone [a subsidiary of Pfizer] has been a reliable and trusted supplier of affordable generic medicines for decades and intends to vigorously defend against these claims.”
LSIPR has approached Teva, Sandoz and Mylan for comment.
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