Attorney General Andy Beshear announced Kentucky has joined a multi-state lawsuit alleging a large group of pharmaceutical companies have monopolized generic drugs, calling the conduct “straightforward and sinister.”
The lawsuit, filed in federal court last month, alleges widespread collusion among the pharmaceutical companies to reduce competition and increase the price of generic drugs.
The states allege the actions violate both state and federal antitrust laws, and are asking for a permanent injunction by the court preventing the companies from continuing “their illegal” conduct. The lawsuit asks the courts to demand the companies correct the anticompetitive effects caused by their conduct, and calls for repayment of the companies’ “ill-gotten gains,” along with civil penalties to the states.
The lawsuit files claims against generic drug-maker Heritage Pharmaceuticals Inc.; Auribindo Pharma USA Inc.; Citron Pharma LLC; Mayne Pharma (USA) Inc.; Mylan Pharmaceuticals Inc.; and Teva Pharmaceuticals USA Inc. alleging they entered into numerous illegal conspiracies in order to unreasonably restrain trade, artificially inflate and manipulate prices and reduce competition in the United States for several generic drugs, including doxycycline hyclate delayed release, an antibiotic, and glyburide, an oral diabetes medication.
“The alleged actions by these companies constitute a massive conspiracy that has caused significant, harmful and continuing effects not just in the country’s health care system but right here in Kentucky,” Beshear said. “At a time when access to affordable health care and low-cost medicine for our seniors and families could not be more critical, these companies have allegedly conspired to rip them off, charging far higher prices than Kentucky families should have to pay.”
In 2015, generic drug sales in the United States were estimated at $74.5 billion; currently, the generic pharmaceutical industry accounts for approximately 88 percent of all prescriptions written in the United States.
In July 2014, the state of Connecticut initiated an investigation of the reasons behind suspicious price increases of certain generic pharmaceuticals. The ongoing investigation uncovered evidence of a broad, well-coordinated and long-running series of conspiracies to fix prices and allocate markets for a number of generic pharmaceuticals.
Generic drug manufacturers operate through their respective senior leadership and marketing and sales executives in a manner that fosters and promotes routine and direct interaction among competitors. The states allege the group of pharmaceutical companies exploited these interactions.
In today’s lawsuit, the 20 states allege that the misconduct was conceived and carried out by senior drug company executives and their subordinate marketing and sales executives. The complaint further alleges that the defendants routinely coordinated their schemes through direct interaction with their competitors at industry trade shows, industry dinners, customer conferences, as well as through direct email, phone and text message communications.
The states allege that the drug companies knew that their conduct was illegal and made efforts to avoid communicating with each other in writing or, in some instances, to delete written communications after becoming aware of the investigation.
The attorneys general in Ohio and Virginia are among the 20 plaintiffs in the lawsuit.
From Attorney General’s Office Communications
