Connecticut leads 51 states and territories in lawsuit against generic drug companies for ‘massive fraud’

June 10, 2020 – Alleging “a massive fraud on the American people,” 51 states and territories, led by Connecticut Attorney General William Tong, are suing generic drug companies for price collusion.

The nearly 600-page complaint, filed Wednesday in U.S. District Court in Hartford, accuses 26 corporate defendants and 10 individuals of engaging in a broad conspiracy to inflate and manipulate the prices of dozens of topical dermatological drugs.

The companies “are stealing billions upon billions of dollars from American families every year,” said Tong. “Competitors are illegally sharing information about prices … and colluding and conspiring to divide the market.”

The Association for Accessible Medicines, a trade group representing generic drug manufacturers, said the allegations laid out in the lawsuit are “inconsistent with AAM’s rules and procedures.”

“We will continue to assess our antitrust policies, because we are committed to the idea that robust competition is the key to providing affordable and accessible medicines to patients while also constraining health care costs,” the group said in a statement.

Congress passed legislation in the 1980s to increase the availability of generic drugs. Since then, these lower-priced, biosimilar medications have saved consumers untold sums as the industry has grown. Generics now make up about 88% of the U.S. drug market.

In recent years, the price of some generics has crept up. Wednesday’s lawsuit is the third filed by state attorneys general against generic drugmakers in recent years; the other cases are pending.

“The generic industry [was] created by Congress to drive prices down,” said Josh Stein, attorney general of North Carolina. “Instead, it’s driven prices up.”

Tong, Stein and Massachusetts Attorney General Maura Healey outlined their case in a conference call with reporters Wednesday afternoon.

The plaintiffs said generic pharmaceutical executives conspired to fix prices and restrain competition. According to the lawsuit, those executives used code words and took other steps to conceal their efforts.

“Our case is built on hard evidence from multiple cooperating witnesses, millions of records and contemporaneous notes that paint an undeniable picture of the largest domestic corporate cartel in our nation’s history,” Tong said.

Among the defendants in the lawsuit are some of the biggest players in the drug industry, including Sandoz, a unit of Novartis; Actavis, a unit of Teva; and Pfizer. Together those companies manufacture about 80 topical creams and gels.

“It’s wrong, it’s illegal and that’s why we’re taking action,” Healey said.

Forty-six states, four U.S. territories and the District of Columbia joined the lawsuit.

By Daniela Altimari, The Hartford Courant
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