HARTFORD, Conn. (CN) — Scrubbing some redactions from a suit that charged 20 generic drugmakers with a massive price-fixing conspiracy, a federal judge gave the public its first look Monday at evidence of the pharmaceutical executives emailing and texting each other to coordinate prices and placate Congress.
“I guess this is what they call ‘co-opetition,” one senior executive at Sandoz on Sept. 21, 2012 — the same day Sandoz and Mylan simultaneously launched a generic Valsartan, a treatment for high blood pressure known by the brand name Diovan.
The email stands out in a new version of the 524-page complaint first published last month with redactions. Ahead of such suggestive emails, the complaint notes that representatives for Sandoz and Mylan spoke at least 21 times by phone to ensure that each competitor would obtain roughly 50 percent market share with the 2012 Valsartan launch.
“Sometimes a little help from our competition is welcome as well,” one Sandoz executive wrote on Sept. 21, as quoted in the complaint.
Led by Connecticut Attorney General William Tong, the suit accuses 20 generic drugmakers of a broad conspiracy to inflate and manipulate generic prices, reduce competition, and unreasonably restrain trade for more than 100 different generic drugs.
The complaint brought together 43 states and Puerto Rico, quoting numerous instances where executives took steps to limit their incrimination by a paper trail.
“No emails please. Phone call,” Ara Aprahamian, vice president of sales and marketing at Taro Pharmaceuticals USA Inc., said in an internal 2014 message.
As Congress began an inquiry that October, other emails unsealed by the court Monday show that outside counsel for Heritage Pharmaceuticals immediately coordinated a response with counsel for Teva Pharmaceuticals and Mylan.
“Spoke with my colleague (redacted name) in DC, who is doing the response letter for Mylan,” the Oct. 3, 2014, email to Jeff Glazer, president and CEO of Heritage Pharmaceuticals, says. “Her husband works for (redacted company) and he is going the response for Teva. They have both been in contract with GPhA on coordinating a response – and the consensus at this point is that the responses will be ‘polite f-u’ letters.
A shared language underlying the communications is apparent as well.
“Fair share, playing nice in the sandbox, and similar terminology have become part of the industry lexicon, and thus part of the larger understanding between Defendants,” the complaint states. “Generic drug manufacturers actively and routinely monitor their fair share and that of their competitors, as well as discuss customer allocation amongst each other within the context of agreements on specific drugs, as set forth more fully below.”
In July 2013, a senior marketing executive at Sandoz sent an internal email identifying 47 products where Sandoz did not have “fair share” of the market. After some back-and-forth internal joking among Sandoz executives about the idea that Sandoz might actually attempt to compete for business in those markets by driving prices down, Armando Kellum, vice president of contracting and business analytics at Sandoz, responded by saying: “Fair Share for all!”
The concept of “fair share” is well ingrained in the generic pharmaceutical industry, but that same price collusion that hinders competition is what attorneys general are taking aim at with this lawsuit.
“The evidence is undeniable and the conspiracy is unconscionable,” Attorney General Tong said in a statement. “Our lawsuit alleges that generic drug manufacturers engaged in a brazen, industrywide conspiracy to fix prices and allocate market share for drugs that we rely on every day. The evidence demonstrates that they knew what they were doing was illegal, and that’s why they sought to mislead Congress, destroyed evidence, and cautioned each other to keep their collusive conversations offline.”
Though the complaint focuses on Teva, it also says the alleged conduct is “pervasive and industrywide.”
Teva has denied the allegations.
“Teva continues to review the issue internally and has not engaged in any conduct that would lead to civil or criminal liability,” the company said in May.
The drugs at issue span all types — tablets, capsules, suspensions, creams, gels and ointments — and classes, including statins, ace inhibitors, beta blockers, antibiotics, anti-depressants, contraceptives, and non-steroidal anti-inflammatory drugs. They treat a range of diseases and conditions from basic infections to diabetes, cancer, epilepsy, multiple sclerosis, HIV, ADHD and more.
The complaint in Connecticut is the second complaint against generic pharmaceutical companies and their executives.
The first complaint, still pending in U.S. District Court in the Eastern District of Pennsylvania, was filed in 2016 and now includes 18 corporate defendants, two individual defendants, and 15 generic drugs. Two former executives from Heritage Pharmaceuticals, Jeffery Glazer and Jason Malek, have entered into settlement agreements and are cooperating with the attorneys general working group in that case.