Connecticut Attorney General William Tong is leading a 44-state coalition in an antitrust lawsuit against 20 makers of generic drugs and 15 individuals, claiming the companies conspired to fix prices for more than 100 medications.
The lawsuit—filed May 10 in the U.S. District Court for the District of Connecticut—alleges Teva Pharmaceuticals USA Inc., Pfizer Inc., Sandoz Inc., Mylan Pharmaceuticals Inc. and other companies have conspired since at least 2012 to fix the prices on well-known drugs like Niacin ER tablets, Warfarin sodium tablets and Omega-3 acid ethyl esters. The drugs span all types, including tablets, capsules, suspensions, creams, gels, ointments and classes, including statins and antidepressants.
The 524-page lawsuit includes emails, telephone calls and texts allegedly showing competitors working together to fix prices on the drugs.
Plaintiffs include Delaware, Florida, New York, New Jersey and Pennsylvania.
“For many years, the generic pharmaceutical industry has operated pursuant to an understanding among generic manufacturers not to compete with each other and to instead settle for what these competitors refer to as ‘fair share,’” according to the lawsuit. “By 2012, Teva and other co-conspirators decided to take this understanding to the next level. 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 lawsuit continues: “Teva had understandings with its highest quality competitors to lead and follow each other’s price increases, and did so with great frequency and success, resulting in many billions of dollars of harm to the national economy over a period of several years.”
‘They Started Asking Questions’
Teva, Pfizer, Sandoz and Mylan are the four largest makers of generic drugs listed as defendants.
In a statement, Teva wrote: “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. Teva delivers high-quality medicines to patients around the world, and is committed to complying with all applicable laws and regulations in doing so. We will continue to vigorously defend the company.”
Sandoz also denied wrongdoing.
In a statement, it wrote: “We acknowledge that Sandoz has been named in an industry-wide litigation involving virtually the entire generic pharmaceutical industry. We believe that these claims are without merit and will vigorously contest them. Sandoz takes its obligations under the antitrust laws seriously. We will continue to be committed to providing high-quality, affordable medicines to United States patients, and conducting business with customers and the government with integrity.”
Pfizer, too, denied the allegations against its subsidiary, Greenstone. It wrote: “The company has cooperated with the Connecticut attorney general since it was contacted over a year ago. We do not believe the company or our colleagues participated in unlawful conduct and deny any wrongdoing. Greenstone has been a reliable and trusted supplier of affordable generic medicines for decades and intends to vigorously defend against these claims.”
Mylan Pharmaceuticals did not respond to requests for comment Monday.
Meanwhile, the Connecticut attorney general, Tong, said two attorneys in his office, Mike Cole and Joe Nielsen, began the investigation six years ago. That investigation began after the attorneys read a story in the New York Times in 2013 about the price of the drug digoxin. Their findings led to the filing by Connecticut and the coalition of dozens of other states.
“They started asking questions and investigating back then,” Tong said. ”This is a Connecticut-led case. … It began in our office and is being led by our office.”
Tong called the alleged price-fixing “overt, blatant and undertaken utterly without shame.”
“They just did it like it’s a regular part of their day, which is why we have been able to identify so much of the evidence through email, text messages and phone records,” he said. “They openly and continuously colluded with one another on price and market share.”
New Jersey Attorney General Gurbir Grewal suggested his office saw a similar pattern.
“We all know that prescription drugs can be expensive. Now we know that high drug prices have been driven in part by an illegal conspiracy among generic drug companies to inflate their prices,” Grewal said. “It is particularly troubling that so much of this unlawful conduct took place in New Jersey. I’ve said before and I’ll say again that New Jersey’s pharmaceutical industry is the envy of the world. But no New Jersey company will get a free pass when it violates the law and harms our residents, just because it is located here.”
The AGs say they hope the lawsuit will help curb drug prices.
“It answers one of the basic questions we all have: … Why are our drug prices so damn expensive?” Tong said. “This is the reason. It’s about price-fixing, collusion and market share.”
As far as the remedy, Tong said: “We want the misconduct to stop and we want the companies to pay back the billions of dollars they stole from the American people, including those in Connecticut.”