20 States Sue Generic Drug Makers for Price Fixing

20 States Sue Generic Drug Makers for Price FixingTwenty states have filed suit against six generic drug makers, accusing the manufacturers of illegally conspiring to fix drug prices on two generic drugs as part of a larger price-fixing scheme.

In July 2014, the state of Connecticut conducted an investigation into what is alleged were “unexplained and suspicious” price increases for generic drugs. The investigation led to an ongoing antitrust investigation by the FBI and U.S. Attorney’s Office into price fixing in the generic drug industry.

According to the suit, the cost of 1,200 generic medications increased by an average of 448 percent between 2013 and 2014. The suit said that the price fixing scheme was initiated by Heritage Pharmaceuticals, an Eatontown, NJ generic drug manufacturer whose former CEO and president face federal charges for conspiracy to fix prices and bid rigging. Heritage has initiated its own lawsuits against the two senior executives and is cooperating in the federal investigation.

The other manufacturers named in the lawsuit include Aurobindo Pharma USA, Inc.; Citron Pharma, LLC; Mayne Pharma (USA), Inc.; Mylan Pharmaceuticals, Inc.; and Teva Pharmaceuticals USA. The suit alleges that these manufacturers conspired to increase prices for an antibiotic — doxycycline hyclate delayed release — and an oral diabetes medication, glyburide.

The suit alleges that representatives from the manufacturers met during industry conferences and trade shows and shared price and other sensitive information. “Through its senior-most executives and salespersons, Heritage organized and initiated a wide-ranging series of conspiracies which included numerous generic drug manufacturers, all of whom were knowing and willing participants,” the complaint states. “Collectively, Defendants were able to obtain a substantial windfall as a result of these illegal agreements.”

Plaintiff states in the action include Delaware, Florida, Hawaii, Idaho, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Minnesota, Nevada, New York, North Dakota, Ohio, Pennsylvania, Virginia and Washington.

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