More Than 40 States File Suit Against Generic Drug Manufacturers

Forty-three states and Puerto Rico have filed a lawsuit against 20 of the largest U.S. generic drug manufacturers. They allege that the companies manipulated prices and agreed not to compete with each other, representing violations of federal and state antitrust and consumer protection laws.

The prices for more than 100 generic drugs – used to treat conditions including diabetes, cancer, and arthritis – were artificially inflated, according to the civil suit. The size of the price increases varied, but some were more than 1,000%.

State Attorney General William Tong of Connecticut, the state that is leading the investigation, cited evidence of a multibillion-dollar fraud. “We have emails, text messages, telephone records, and former company insiders that we believe will prove a multi-year conspiracy to fix prices and divide market share for huge numbers of generic drugs,” he said.

Fifteen individual senior executives were also named in the suit, which is the second to be filed in the investigation. Eighteen corporate defendants and two individual defendants were named in 2016, resulting in two settlement agreements so far.

The investigation comes in the midst of increased concern on Capitol Hill about surging drug prices, with pharmaceutical executives and pharmacy benefit managers having testified in recent months. Attorney General Tong said this collusion amongst manufacturers of generics is a primary reason for the high cost of health care in the U.S.

Source: AP, May 11, 2019.