US States Sue Drugmakers Over Price-fixing

  • US States Sue Drugmakers Over Price-fixing (c) AVN Photo Lab/ShutterstockUS States Sue Drugmakers Over Price-fixing (c) AVN Photo Lab/Shutterstock

A coalition of 44 US states has filed a 500-page lawsuit against 20 leading generic drugmakers supplying the domestic market. The companies are accused of operating a sweeping scheme to raise prices by as much as 1,000% and at the same time stifle competition.

Israeli generics giant Teva is at the center of the litigation alleging that the US generics industry has a long history of discreet agreements “to divvy up the market and reduce competition.” The situation is said to have worsened since 2012. The charges focus mainly on the July 2013 to January 2015 time frame.

The suit filed in the US District Court in Connecticut seeks damages, civil penalties and actions by the court to restore competition and eliminate “one of the most egregious and damaging price-fixing conspiracies in the history of the United States.”

Specifically, the complaint says the companies colluded to significantly raise prices on 86 medicines. These spanned the range from tablets and capsules to creams and ointments to treat such widespread ailments as diabetes, high cholesterol, high blood pressure, cancer and epilepsy.

Rather than trying to gain market share through competitive pricing, the states said the generics makers “systematically and routinely” communicated with one another to create an artificial equilibrium.

As defendants, the filing names 15 corporate executive who it said carried out the scheme. More than half are listed as based in New Jersey, where many US and international companies have their headquarters.

Sandoz, the subsidiary of Swiss-based Novartis, is among the drugmakers named. Other internationally active generics players allegedly involved include US-domiciled Pfizer, along with Mylan (the Netherlands), Actavis (Ireland) and Dr. Reddy’s (India).

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