Six generics companies hit by 20-state-strong lawsuit

pharmafile | December 16, 2016 | News story | Medical Communications Heritage, Mylan, Teva 

Following hot on the heels of yesterday’s news that a former CEO and president of Heritage Pharmaceuticals had been charged with conspiracy to fix drug prices, it has been revealed that 20 states have sued six generics companies for the same behaviour. The cases are directly linked, with Heritage Pharmaceuticals thought to be the ‘ring-leader’ of the group of generics companies’ collusion over the price of antibiotic, doxycycline hyclate, and glyburide, a drug to treat those with diabetes.

The six companies involved are Mylan, Teva, Heritage, Citron, Aurobindo and Mayne. According to Reuters, the relationships between the companies went beyond industry relations and extended into steak dinners and “girls’ nights out” where sensitive details were discussed.

It is suggested by the suit that Mylan agreed to stop selling its version of the generic drug, doxycycline, at a large national wholesaler and large pharmacy to allow Heritage a way into the market. It is alleged that, as each company entered the market, discussions took place to divide up the market in favourable ways and prices increases were formulated.

The initial investigation began into generic drug prices after a report highlighted the increasing price of generic drugs, with doxycycline at the fore of this discussion. The price of this drug reportedly increased stratospherically from $20 to $1,849 in a seven month period.

The suit that is now launched against the six generics companies is thought to be just the beginning of steps to try rein in the companies and the prices involved. Momentum has been gathered by Mylan’s recent EpiPen scandal and with these individual cases now emerging, it seems to be gathering pace.

 “My office has dedicated significant resources to this investigation for more than two years and has developed compelling evidence of collusion and anticompetitive conduct across many companies that manufacture and market generic drugs in the United States,” said attorney general George Jepsen. “While the principal architect of the conspiracies addressed in this lawsuit was Heritage Pharmaceuticals, we have evidence of widespread participation in illegal conspiracies across the generic drug industry.  Ultimately, it was consumers – and, indeed, our healthcare system as a whole – who paid for these actions through artificially high prices for generic drugs. We intend to pursue this and other enforcement actions aggressively, and look forward to working with our colleagues across the country to restore competition and integrity to this important market.” 

Connecticut is joined in the case by Delaware, Florida, Hawaii, Idaho, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Minnesota, Nevada, New York, North Dakota, Ohio, Pennsylvania, Virginia and Washington; adding a fair amount of financial and legal firepower behind the case.

Ben Hargreaves

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