AP NEWS

SC joins drive to restore fairness in generic drug business

May 13, 2019

COLUMBIA, S.C. – Attorney General Alan Wilson joined a 44-state coalition led by Connecticut Attorney General William Tong in a lawsuit against Teva Pharmaceuticals and 19 of the nation’s largest generic drug manufacturers alleging a broad conspiracy to artificially inflate and manipulate prices, reduce competition and unreasonably restrain trade for more than 100 different generic drugs.

The lawsuit, filed in U.S. District Court for the District of Connecticut, also names 15 individual senior executive defendants who were responsible for sales, marketing, pricing and operations. The drugs at issue account for billions of dollars of sales in the United States, and the alleged schemes increased prices affecting the health insurance market, taxpayer-funded health care programs such as Medicare and Medicaid and individuals who must pay artificially inflated prices for their prescriptions drugs.

“We’ve all seen prices go up for prescription drugs and generics usually make them more affordable,” Wilson said. “It’s unconscionable that these individuals and companies would work together to increase the prices of these generic drugs that people rely on, in some cases for their lives.”

There is hard evidence that shows the generic drug industry perpetrated a multi-billion dollar fraud on the American people, Tong said.

“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,” he 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 health care, and specifically the prices for generic prescription drugs, are so expensive in this country. This is a big reason why. 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.”

The complaint alleges that Teva, Sandoz, Mylan, Pfizer and 16 other generic drug manufacturers engaged in a broad, coordinated and systematic campaign to conspire with each other to fix prices, allocate markets and rig bids for more than 100 different generic drugs.

The drugs span all types, including tablets, capsules, suspensions, creams, gels, ointments and classes, including statins, ace inhibitors, beta blockers, antibiotics, anti-depressants, contraceptives, non-steroidal anti-inflammatory drugs, and they treat a range of diseases and conditions from basic infections to diabetes, cancer, epilepsy, multiple sclerosis, HIV, ADHD, and more.

In some instances, the coordinated price increases were more than 1,000 percent.

The complaint lays out an interconnected web of industry executives where these competitors met with each other during industry dinners, “girls’ nights out,” lunches, cocktail parties and golf outings, and they communicated via frequent telephone calls, emails and text messages that sowed the seeds for their illegal agreements. Throughout the complaint, defendants use terms such as “fair share,” “playing nice in the sandbox” and “responsible competitor” to describe how they unlawfully discouraged competition, raised prices and enforced an ingrained culture of collusion.

The lawsuit seeks damages, civil penalties and actions by the court to restore competition to the generic drug market.

In addition to Connecticut and South Carolina, Alabama, Alaska, Arizona, Colorado, Delaware, Florida, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New Jersey, New Mexico, New York, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, Tennessee, Utah, Vermont, Virginia, Washington, West Virginia, Wisconsin and Puerto Rico joined the suit.

The complaint is the second to be filed in an ongoing, expanding investigation that the Connecticut Office of the Attorney General has referred to as possibly the largest cartel case in the history of the United States. The first complaint, still pending in U.S. District Court in the Eastern District of Pennsylvania, was filed in 2016 and now includes 18 corporate defendants, two individual defendants and 15 generic drugs.

Two former executives from Heritage Pharmaceuticals, Jeffery Glazer and Jason Malek, have entered into settlement agreements and are cooperating with the Attorneys General working group in that case.