Delaware Attorney General Kathy Jennings joined 42 states and Puerto Rico in a lawsuit against Teva Pharmaceuticals and 19 of the nation’s largest generic drug manufacturers alleging a broad conspiracy to artificially inflate and manipulate prices, reduce competition and unreasonably restrain trade for more than 100 different generic drugs.
The lawsuit, filed May 10 by Connecticut Attorney General William Tong in the U.S. District Court for the District of Connecticut, also names 15 individual senior executive defendants at the heart of the conspiracy who were responsible for sales, marketing, pricing and operations. The drugs at issue account for billions of dollars of sales in the U.S., and the alleged schemes increased prices affecting the health inscqurance market, taxpayer-funded health care programs like Medicare and Medicaid and individuals who must pay artificially-inflated prices for their prescription drugs.
“It’s hard enough for thousands of Delawareans — including many of our seniors living on fixed incomes — to afford basic health care and medication,” said Jennings. “Schemes that tilt the playing field even further against the middle class and our most vulnerable neighbors are unconscionable, unacceptable and illegal. The people and companies responsible for this conspiracy will be held accountable.”
The complaint alleges that Teva, Sandoz, Mylan, Pfizer and 16 other generic drug manufacturers engaged in a broad, coordinated and systematic campaign to conspire with each other to fix prices, allocate markets and rig bids for more than 100 different generic drugs. The drugs span all types, including tablets, capsules, suspensions, creams, gels, ointments, and classes, including statins, ace inhibitors, beta blockers, antibiotics, antidepressants, contraceptives, non-steroidal anti-inflammatory drugs and treat a range of diseases and conditions from basic infections to diabetes, cancer, epilepsy, multiple sclerosis, HIV and ADHD. In some instances, the coordinated price increases were more than 1,000%.
The complaint lays out an interconnected web of industry executives where these competitors met with each other during industry dinners, lunches, cocktail parties, golf outings and communicated via frequent telephone calls, emails and text messages that sowed the seeds for their illegal agreements. Throughout the complaint, defendants use terms like "fair share," "playing nice in the sandbox" and "responsible competitor" to describe how they unlawfully discouraged competition, raised prices and enforced an ingrained culture of collusion.
The lawsuit seeks damages, civil penalties and actions by the court to restore competition to the generic drug market.
The filing is the second multistate complaint that Delaware has joined alleging price fixing in the generic pharmaceutical market. The first complaint, 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.