Lawsuit says pharm companies conspired to fix prices of generic drugs

Major pharmaceutical companies are being charged with conspiring to inflate prices on a variety of generic drugs by up to 1,000 percent, according to reports in the New York Times, the Associated Press and CBS News, among others.

On May 11, attorneys general representing 43 states and Puerto Rico sued 20 drug makers including Teva, Pfizer, Novartis and Mylan, alleging that the companies colluded to fix prices, during a 17-month period beginning in July 2013. The lawsuit also names 15 individual executives at the companies, according to the AP.

The AP quotes Connecticut Attorney General William Tong as saying, “We have hard evidence that shows the generic drug industry perpetrated a multibillion dollar tax fraud on the American people.” The evidence, Tong says, includes text messages, telephone records and statements from former company insiders.

In addition, the AP says, the lawsuit charges that drug makers had for many years agreed informally not to compete among themselves but instead settle for each having what the companies called a “fair share” of the market. But the suit alleges that in 2012 the companies decided to go further and to “significantly raise prices on as many drugs as possible.” In some cases those increases amounted to more than 1,000 percent.

According to the Association for Accessible Medicines, a trade group representing generic drug manufacturers, generics accounted for 89 percent of prescriptions dispensed in the U.S. in 2018.

The lawsuit claims that more than 100 generic drugs were included in the alleged price-fixing plan. Among the drugs affected are oral antibiotics, blood thinners, contraceptives, and medications used to treat H.I.V., asthma and A.D.H.D.

According to the Times, the lawsuit portrays Teva Pharmaceuticals USA as leading the conspiracy, having increased prices on about 400 formulations of 112 generic drugs. The paper quotes a Teva statement saying it is reviewing the issue internally and “is not engaged in any conduct that would lead to civil or criminal liability.”

The lawsuit, which was filed in federal court in Connecticut, seeks a permanent injunction to stop the companies from engaging in their alleged conduct, and reimbursement of profits and payment of damages to state agencies and consumers harmed by the practice.