44 States File Against Largest US Drug Manufacturers

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By Amanda Averill, Sr. Contributor


A lawsuit was filed by 44 states in the U.S. District Court for the District of Connecticut against 20 of the largest generic drug manufacturers in the United States with allegations involving conspiracy to fix the prices of generic drugs.

For years, state and federal prosecutors have been questioning why some generic drug prices have not dropped as usual. Typically, once a generic drug joins the market, the prices of pharmaceuticals fall significantly. Suspiciously, some were not following that trend.

The allegations involve conspiracy to fix the prices of the generic drugs in order to amplify profits and stray from competition. This alleged fixed pricing has an affect on the consumer, health care programs, and the health care insurance market. The lawsuit seeks civil penalties and damages by the court to bring balance back to the generic drug market.

According to the Ohio Attorney General news release, AG Dave Yost said,

“Ohioans who need medicine might think generic drugs would be their cheapest option – but some manufacturers have rigged the systems to avoid competition.”  

He continued by saying, “That’s not how a free market works, and the conspiracy to avoid competition makes prices higher – and it’s against the law. This lawsuit is the prescription for lower medicine prices in a free market.”

The lawsuit includes the names of 15 individuals who are senior executive defendants that were responsible for sales, pricing and overall operations. The allegations include Sandoz, Mylan, Tega, Apotex, Greenstone and 15 more generic drug manufacturers that conspired with each other. They supposedly fixed the prices and rigged bids for over 100 generic drugs. These drugs range from capsules, tablets, gels, and ointments to drugs that treat depression, cancer, HIV, ADHD and more.

The executives supposedly communicated through frequent meetings, golf outings, industry dinners, text messages, phone calls, emails and more, discussing the encouragement and planning of their collusion. Some emails showed the ways the companies would divide up the markets. 

The complaint also shows that a Teva director created a ranking system of competitors that deciphered which competitors were most willing to work with Teva’s supposed scheme. 

According to an interview with PBS on May 15, 2019, Chip Davis, CEO of the Association for Accessible Medicines stated that “this industry is actually facing real sustainability challenges. They aren’t focused on colluding with each other. They’re trying to figure out a way that they can sustain their business operations, so that patients can continue to benefit from the drugs that they provide.”

Davis later said, “The members that I know and the people that work there get up every day with one mission in mind. They want to make sure that they can go and produce safe, high-quality, effective medicines at a price that patients can afford.”

In addition to this response, Teva “vehemently denies the allegations and will continue to vigorously defend the company,” according to Forbes.


Sources:

https://www.ohioattorneygeneral.gov/Media/News-Releases/May-2019/Yost-Joins-Lawsuit-Against-20-Generic-Drug-Manufac

https://www.forbes.com/sites/nathanvardi/2019/06/12/move-over-martin-shkreli-this-pharma-exec-is-accused-of-fixing-prices-on-107-drugs/#77b126a21cb3

https://www.raps.org/news-and-articles/news-articles/2019/6/connecticut-ag-releases-unredacted-generic-drug-pr

https://www.pbs.org/newshour/show/how-generic-drug-makers-are-responding-to-price-fixing-lawsuit

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