Attorneys general from 43 states and Puerto Rico, with Connecticut taking the lead, are alleging that nation’s largest generic drug manufacturers conspired to artificially inflate and manipulate prices for more than 100 different generic drugs.
The attorneys general allege the drugs are used for treatment of a wide variety of medical conditions, including diabetes, cancer and arthritis, among others.
The lawsuit, which was filed in federal court in Connecticut on Friday, also names 15 individual senior executives responsible for sales, marketing and pricing.
“We have hard evidence that shows the generic drug industry perpetrated a multibillion dollar fraud on the American people,” Connecticut Attorney General William Tong said. “We have emails, text messages, telephone records and former company insiders that we believe will prove a multi-year conspiracy to fix prices and divide market share for huge numbers of generic drugs.”
The Associated Press reported that Ton said the investigation had uncovered a primary reason why the cost of health care — and specifically generic prescription drugs — has been so high in this country.
The new court suit was the second that has been filed in the investigation. The first, filed in 2016 and which Iowa Attorney General Tom Miller joined, named 18 corporate defendants and two individual defendants. Two former drug company executives entered into settlement agreements and are cooperating with the attorneys general in the investigation.
The AP reported that a spokesman for one of the companies named in the suit, Teva Pharmaceuticals USA Inc., a wholly owned subsidiary of Israeli-based Teva Pharmaceuticals Industries Ltd, said Teva hasn’t engaged in any conduct that would lead to civil or criminal liability.
“The allegations in this new complaint and in the litigation more generally, are just that — allegations,” Kelley Dougherty, a Teva vice president, said in a statement.
Investigators said the drugs covered in the suit account for billions of dollars of sales in the United States.
The suit alleges that makers of generic drugs had operated under an agreement not to compete with each other and to settle instead for what the companies referred to as a “fair share” of the market to avoid pushing prices down through competition.
The suit alleges that by 2012, Teva and the other companies decided to “take this understanding to the next level,” further alleging that “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 suit says the companies sought to “significantly raise prices on as many drugs as possible” through an understanding to lead and follow each other’s price increases. Those increases varied but were over 1,000% for a number of drugs.
The civil suit is asking for a finding that the defendants’ actions violated federal and state antitrust and consumer protection laws and is seeking a permanent injunction preventing the companies from continuing the conduct.
With Americans facing ever increasing health care costs, this is clearly a worthwhile effort. Cost increases of 1,000% or more for generic drugs are difficult to justify.
The court should order reimbursement of the unreasonable profits from generic drugs.