Generic Drug Companies Accused of Price Fixing in 20 States
In a civil complaint filed December 15, 2016, 20 State Attorneys General accused six generic drug companies, including Teva Pharmaceuticals and Mylan, of engaging in price-fixing schemes. The complaint alleges that the companies conspired to artificially inflate the prices of the antibiotic drug, doxycycline hyclate, and the diabetes drug, glyburide. The complaint asserts that these competing manufacturers’ executives engaged in price fixing by agreeing on how much market share or to which customers each competitor was entitled. The complaint alleges that manufacturers communicated and agreed to collectively raise prices for a particular generic drug.
In a separate Federal complaint filed December 14, 2016, two high level executives of the generic pharmaceutical company, Heritage Pharmaceuticals, were charged with conspiring to fix prices and allocate customers for the same antibiotic and diabetes drug identified above. The Federal complaint identifies Heritage as the “principal architect and ringleader” of the alleged price-fixing “scheme.” The complaint alleged that former Heritage executives, Jeffrey Glazer and Jason Malek, contacted competing companies seeking to arrange for illegal price-fixing deals before entering the market for the two drugs. As it happens, Heritage Pharmaceuticals was also named in the civil complaint filed on December 15th.
Generic drug companies have long faced criticism for increasing drug prices despite the fact that price increases are due to a myriad of factors such as industry consolidation, FDA-mandated plant closures, or elimination of unprofitable generic drug product lines. Notwithstanding these defenses, the above complaints have purported to classify these price increases as part of an overall price-fixing scheme amongst a number of competing generic drug manufacturers.
This civil investigation, and others like it, will soon involve more than the two drugs and six companies currently involved in the lawsuit. The potential implications are wide-reaching, given that over 80 percent of all prescriptions dispensed in the United States are generic drugs. Drug pricing is under intense scrutiny. As such, it is imperative that generic drug manufacturers have competent healthcare legal counsel with industry knowledge as well as experience defending these types of civil lawsuits.
Contact Frier Levitt to speak with an attorney today.
