Coalition of AGs Accuse 26 Generic Drug Companies of Price Fixing

June 17, 2020 - A coalition of 51 attorney generals from around the US recently filed an antitrust complaint alleging that over two dozen drug manufacturers inflated the price of generic drugs illegally.

The antitrust complaint named 26 generic, dermatological drug manufacturers and ten individual executives that were involved in the alleged healthcare fraud scheme. Three of the manufacturers identified in the lawsuit –  Taro, Perrigo, and Fougera (Sandoz) – sold nearly two-thirds of all the generic topical products dispensed in the US from 2007 to 2014.

“Generic drugs are meant to provide consumers with reliable, cost-effective alternatives to name-brand medication, but because of a widespread conspiracy between these companies, consumers were left paying the bill while pharmaceutical executives lined their pockets with billions,” New York Attorney General Letitia James said in a press release. 

“These companies put profits over public health, which could have resulted in millions across the country being left without the vital medication they needed. Our coalition includes almost every state, district, territory, and province because Americans across the nation were cheated out of their money and it's time these companies are held accountable.”

The complaint alleges that the companies committed systematic antitrust violations, price-fixing, market allocating, and rigging of bids for more than 80 different topical, generic drugs.

The release noted that the companies repeatedly communicated directly to minimize competition, including by substantially raising prices on dozens of topical products to manipulate the market and receive a larger share of market than allowed.

Other generic manufacturers involved include Actavis, Mylan, Teva, G&W, and Glenmark and has affected every federal, state, and commercial payor in the US who paid for generic drugs from 2009 and 2016.

“Today’s dermatology complaint details pervasive antitrust violations in the industry that inflicted massive harms. It alleges that — to facilitate agreements to fix prices and allocate markets — competitors communicated, for example, when manufacturers were entering or leaving the market, when someone saw an opportunity to raise prices, when market shares were not “fair,” and when competitors did not ‘play nice,’” Attorney General James stated. 

Today’s lawsuit is the third in a series of complaints from ongoing antitrust investigations into the generic drug industry. 

The first complaint filed in December 2016 by 20 states alleged that 18 of the nation’s generic drug manufacturers inflated the prices of 15 generic drugs. In May 2019, the second complaint was filed against 20 of the nation’s largest generic drug manufacturers for inflating generic drug prices for 100 drugs. 

This isn’t the first time that pharmaceutical company Sandoz found itself in hot water.

Back in March, the Department of Justice announced that it charged Sandoz for fixing generic drug prices, rigging bids, and other antitrust conspiracies. 

The March case was the seventh to be filed in the Antitrust Division’s ongoing investigation into the generic pharmaceutical industry and Sandoz is the third pharmaceutical company to be charged, the announcement added. 

Sandoz entered a deferred prosecution agreement to resolve the charge. Per the agreement, the company paid $195 million criminal penalty and also admitted to the monetary damages identified by the federal government.

Sandoz also said that it participated in an antitrust conspiracy with four companies including generic drug companies in New York and Michigan, as well as Kavod Pharmaceuticals.

“Sandoz conspired for years with other manufacturers and their executives to raise prices for critical medications, and the Antitrust Division will continue its ongoing investigations to hold both individuals and corporations accountable for these crimes,” Attorney General Makan Delrahim of the DOJ’s Antitrust Division, said in a statement.