Delaware joins multistate lawsuit on generic pharmaceutical price-fixing

Delaware Attorney General Kathy Jennings has joined 42 states and Puerto Rico in a lawsuit against Teva Pharmaceuticals and 19 of the nation’s largest generic drug manufacturers, alleging a broad conspiracy to artificially inflate and manipulate prices, reduce competition and unreasonably restrain trade for more than 100 different generic drugs.

The lawsuit, filed Friday, May 10, by Connecticut Attorney General William Tong in the U.S. District Court for the District of Connecticut, also names 15 individual senior executive defendants at the heart of the conspiracy who were allegedly responsible for sales, marketing, pricing and operations.

The drugs at issue account for billions of dollars of sales in the United States, and the alleged schemes allegedly increased prices affecting the health insurance market, taxpayer-funded healthcare programs, such as Medicare and Medicaid, and individuals who must pay artificially-inflated prices for their prescription drugs.

“It’s hard enough for thousands of Delawareans — including many of our seniors living on fixed incomes — to afford basic health care and medication,” said Jennings. “Schemes that tilt the playing field even further against the middle class and our most vulnerable neighbors are unconscionable, unacceptable and illegal. The people and companies responsible for this conspiracy will be held accountable.”

The complaint alleges that Teva, Sandoz, Mylan, Pfizer and 16 other generic drug manufacturers engaged in a broad, coordinated and systematic campaign to conspire with each other to fix prices, allocate markets and rig bids for more than 100 different generic drugs.

The drugs span all types, including tablets, capsules, suspensions, creams, gels and ointments, and all classes, including statins, ACE inhibitors, beta blockers, antibiotics, anti-depressants, contraceptives and non-steroidal anti-inflammatory drugs, and treat a range of diseases and conditions from basic infections to diabetes, cancer, epilepsy, multiple sclerosis, HIV, ADHD, and more. In some instances, the coordinated price increases were more than 1,000 percent, according to the AG’s Office.

The complaint lays out what they described as an interconnected web of industry executives where the competitors met with each other during industry dinners, lunches, cocktail parties and golf outings, and communicated via frequent telephone calls, emails and text messages that allegedly sowed the seeds for their alleged illegal agreements, Jennings said.

Throughout the complaint, defendants use terms like “fair share,” “playing nice in the sandbox,” and “responsible competitor” to describe how they allegedly unlawfully discouraged competition, raised prices and enforced an ingrained culture of collusion, she noted.

The lawsuit seeks damages, civil penalties and actions by the court to restore competition to the generic drug market.

Last Friday’s filing is the second multistate complaint that Delaware has joined alleging price fixing in the generic pharmaceutical market. The first complaint, still pending in U.S. District Court in the Eastern District of Pennsylvania, was filed in 2016 and now includes 18 corporate defendants, two individual defendants and 15 generic drugs. Two former executives from Heritage Pharmaceuticals, Jeffery Glazer and Jason Malek, have entered into settlement agreements and are cooperating with the Attorneys General working group in that case.

Corporate defendants in the new filing include: Teva Pharmaceuticals USA Inc., Sandoz Inc., Mylan Pharmaceuticals Inc., Actavis Holdco US Inc., Actavis Pharma Inc., Amneal Pharmaceuticals Inc., Apotex Corp., Aurobindo Pharma U.S.A. Inc., Breckenridge Pharmaceutical Inc., Dr. Reddy’s Laboratories Inc.; Glenmark Pharmaceuticals Inc. USA; Greenstone LLC, Lannett Company Inc., Lupin Pharmaceuticals Inc., Par Pharmaceutical Companies Inc., Pfizer Inc., Taro Pharmaceuticals USA Inc., Upsher-Smith Laboratories LLC, Wockhardt USA LLC and Zydus Pharmaceuticals (USA) Inc.

Individual defendants include nearly two dozen current and former executives at the companies, largely those involved in marketing, accounts and sales, as well as other upper-level executives.

In addition to Delaware and Connecticut, Alabama, Alaska, Arizona, Colorado, Florida, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New Jersey, New Mexico, New York, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina, Tennessee, Utah, Vermont, Virginia, Washington, West Virginia, Wisconsin and Puerto Rico joined the suit.