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US states sue generic firms over ‘inflated’ prices

Companies accused of “multi-billion dollar fraud" and conspiracy

A wide-ranging lawsuit has been filed in the US by 44 states, claiming price fixing for dozens of widely-used generic medicines.

All told, 20 pharma companies are cited in the lawsuit, including Teva Pharmaceuticals USA, Novartis’ Sandoz unit, Mylan, and Pfizer, amongst others, which are accused of perpetrating a “multi-billion dollar fraud on the American people.”

The legal action was filed on Friday by Connecticut Attorney General William Tong, and follows a five-year investigation into the alleged conspiracy to fix prices and allocate markets for more than 100 different generics, including drugs for heart disease, diabetes and cancer.

Teva

Teva, Sandoz, Mylan and Pfizer have all been cited in the lawsuit

During the probe, the states issued more than 300 subpoenas to various telephone carriers, and have obtained phone call and text message records for companies and individuals throughout the generic drug industry that they say prove a conspiracy.

It claims that the usual dynamics of the generics market – with the first generic to launch reducing the price from the brand slightly and a big fall-off after the second and subsequent generics enter the market – has changed.

“Prices for hundreds of generic drugs have risen – while some have skyrocketed, without explanation,” it says.

15 industry executives are also cited by name in the lawsuit, most of whom held senior sales, marketing or commercial positions at the named pharmaceutical companies.

The complaint alleges that during a 19-month period from July 2013 to January 2015, “Teva significantly raised prices on approximately 112 different generic drugs. Of those 112 different drugs, Teva colluded with…competitors on at least 86 of them (the others were largely in markets where Teva was exclusive).”

It adds: “The size of the price increases varied, but a number of them were well over 1,000%.”

This is the second suit to be filed in connection with the investigation. The first – which is still pending – was submitted in 2016 and covers 18 corporate defendants, two individual defendants, and 15 generic drugs.

According to Tong, an interconnected web of industry executives was created in which competitors met at “industry dinners, ‘girls nights out’, lunches, cocktail parties, golf outings and communicated via frequent telephone calls, emails and text messages that sowed the seeds for their illegal agreements.”

The result was unlawfully discouraged competition, elevated prices and an ingrained culture of collusion.

In a statement, Teva said “the allegations in this new complaint, and in the litigation more generally, are just that – allegations. Teva continues to review the issue internally and has not engaged in any conduct that would lead to civil or criminal liability.”

Article by
Phil Taylor

13th May 2019

From: Marketing

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