Dozens of States Sue 20 Drug Companies for Price Fixing and Obstruction

By David Boddiger | May 11, 2019 | 8:53pm

Healthcare

Forty-four states, led by the Connecticut attorney general’s office, have filed a lawsuit in U.S. District Court against 20 generic pharmaceutical manufacturers accusing the companies of conspiring to keep generic drug prices artificially high.

The states accuse Israeli company Teva Pharmaceuticals USA Inc. of orchestrating the plan, which involved 19 other drug companies, Reuters reported. Teva Pharmaceuticals is the world’s biggest producer of generic drugs.

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The investigation began in 2014 and covered at least 300 medications, according to The Washington Post. Teva was found to have colluded with other manufacturers to raise prices on at least 86 generic drugs between July 2013 and January 2015.

Generic medications account for 90% of all prescriptions filled in the U.S., according to the Post. In some cases, prices were inflated by more than 1,000%.

Meanwhile, Teva pulled in about $18.9 billion in revenue last year.

“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 465-page lawsuit states, according to Reuters.

Among the generic drugs involved were treatments for diabetes, epilepsy, and cancer, among others.

Additionally, the state attorneys general said that pharmaceutical executives tried to obstruct the investigation, including by deleting text messages and coordinating responses to investigators, the Post said.

As part of that effort, the lawsuit said former Teva executive Nisha Patel exchanged at least 1,240 phone calls and text messages with executives at 16 competing pharmaceutical companies.

Teva has said it is reviewing the lawsuit internally and “has not engaged in any conduct that would lead to civil or criminal liability.”

In recent years, many generic prescription drug prices have skyrocketed (along with brand-name drugs), seemingly without explanation. Rep. Elijah Cummings and Sen. Bernie Sanders, among others, launched congressional inquiries into the price spikes.

Per the Post:

The states’ investigation, as outlined Friday in the latest complaint, explains why those prices have jumped. State lawyers said the generic drug manufacturers argued publicly that price increases were caused by industry consolidation and FDA-mandated plant closures. But the real reason, the investigators said, “is much more straightforward — illegal collusion among generic drug manufacturers.’’

In addition to the companies, the lawsuit targets 15 senior executives who oversee generic drug sales, marketing, and pricing, ABC News reported.