Generic-Drugs Antitrust Case Expanded to Include 18 Companies

HARTFORD, Conn. (CN) – Attorneys general from 46 states and the District of Columbia expanded their antitrust case against the $75 billion generic drug industry to include 18 companies and at least 15 drugs. 

The consolidated amended complaint unveiled Tuesday also takes the unprecedented step of going after senior executives at two generic drug companies.

Mylan President Rajiv Malik and Emcure Pharmaceuticals CEO Satish Mehta are both named as defendants to the 243-page complaint, which was transferred from Connecticut to Philadelphia.

Led by Connecticut the states allege a number of specific agreements among drugmakers to fix prices and allocate customers for at least 15 generic products. 

Connecticut Attorney General George Jepsen said discovery in the case, which has been put on hold while the U.S. Department of Justice wraps up parallel criminal proceedings with some of the same defendants, could widen the complaint further.

The 12 companies newly named as defendants make everything from the delayed-release antibiotic doxycycline to acetazolamide, which is used to treat glaucoma and epilepsy. 

Jepsen said generic drugs account for approximately 88 percent of all prescriptions written in the United States. 

The price-fixing investigation started in July 2014. Because the probe remains ongoing, portions of the complaint, including text messages between top executives and sales reps, are redacted.

“The price-fixing is systematic,” Jepsen said Tuesday during a press conference in his office. “It is pervasive and that a culture of collusion exists within the industry.”

The complaint says many of the generic drug manufacturers are concentrated in New Jersey and eastern Pennsylvania, giving them additional opportunities to foster connections and meet and collude beyond the trade shows and conferences, as well as through email and text messages. 

“For example, in January 2014, at a time when the prices of a number of generic drugs were reportedly soaring, at least thirteen (13) high-ranking male executives, including CEOs, Presidents and Senior Vice Presidents of various generic drug manufacturers, met at a steakhouse in Bridgewater, New Jersey,” the complaint states. 

The complaint goes on to explain how “female generic pharmaceutical sales representatives also get together regularly for what they refer to as a ‘Girls Night Out’ (GNO), or alternatively ‘Women in the Industry’ meetings and dinners.”

“During these GNOs, meetings and dinners, these representatives meet with their competitors and discuss competitively sensitive information,” the complaint continues.

The complaint says the defendants “actively monitor and track each others’ fair share, and discuss it with each other in the context of agreements on specific drugs.”

“If even one competitor is not aware of (and behaving in accordance with) the larger understanding, it can lead to unwanted competition and lower prices,” Jepsen says.

Mylan said there is no evidence to back up the allegations. 

“Our review of the Connecticut Attorney General’s press release underpinning the complaint does not change our views,” the company said in a statement on its website. “We have asked the various attorneys general leading this case to share with us what information they believe supports these new allegations and, to date, they have not done so. Mylan has deep faith in the integrity of its President, Rajiv Malik, and stands behind him fully. Mylan and Rajiv Malik both intend to defend this case vigorously, and we look forward to the opportunity to present a full defense.”

Apart from highlighting its integrity and faithful undertaking of its legal obligations, Mylan otherwise declined to comment on the pending case.

Teva Pharmaceuticals, which was one of the original six defendants named in the lawsuit originally filed back in December 2016, said it will continue to defend itself themselves and deny the accusations.

“Teva denies these allegations and will continue to defend itself vigorously in court,” a spokeswoman said in a statement. “In accordance with our values, Teva is committed to complying with all applicable competition laws and regulations. To this end, we have a robust compliance program designed to ensure that our employees are aware of competition laws, regulations and internal policies, and their obligations to abide by them.”

Meanwhile, the Department of Justice has successfully argued in favor of a stay on discovery in the attorney general’s case for another six months. 

Assistant Attorney General Joseph Nielson said they believe it could potentially harm their ongoing criminal investigation because it would give defendants access to information they might normally not have access to in a criminal proceeding. 

Joining Connecticut as plaintiffs are Alabama, Alaska, Arizona, Arkansas, California, Colorado, Delaware, Florida, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Louisiana, Maine, Maryland, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico, New York, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, South Carolina, Tennessee, Utah, Vermont, Washington, West Virginia and Wisconsin, the Commonwealths of Kentucky, Massachusetts, Pennsylvania, Puerto Rico and Virginia, and the District of Columbia. 

The defendants are Actavis Holdco U.S., Inc., Actavis Pharma, Inc., Ascend Laboratories, LLC, Apotex Corp., Aurobindo Pharma USA, Inc., Citron Pharma, LLC, Dr. Reddy’s Laboratories, Inc., Emcure Pharmaceuticals, Ltd., Glenmark Pharmaceuticals, Inc., Heritage Pharmaceuticals, Inc., Lannett Company, Inc., Rajiv Malik, Mayne Pharma, Inc., Satish Mehta, Mylan Pharmaceuticals, Inc., Par Pharmaceutical Companies, Inc., Sandoz, Inc., Sun Pharmaceutical Industries, Inc., Teva Pharmaceuticals USA, Inc., and Zydus Pharmaceuticals (USA), Inc.

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