States file 3rd generics price-fixing suit, alleging ‘multibillion-dollar fraud’ by 26 companies, 10 execs
Years after states filed an initial price-fixing lawsuit against generics companies—led by the office of the Connecticut attorney general—they’re not letting up. In fact, they’re adding to their list of allegations, and the number of defendants continues to grow.
In a new 606-page lawsuit (PDF), 51 states and territories claim 26 generics companies and 10 individuals worked together to fix prices on at least 80 dermatological medicines. The defendants include some of the biggest names in the generics business, including Novartis’ Sandoz unit, Teva, Mylan and Pfizer.
The states allege company executives used phone conversations, text message, emails, conventions and dinner parties to “fix prices and restrain competition as though it were a standard course of business,” Connecticut’s attorney general William Tong said in a statement.
The probe is “expanding,” Tong says; Wednesday’s lawsuit follows two others filed in recent years by states.
In all, the conduct represented a “multibillion-dollar fraud” that was “so systemic that it has touched nearly every single consumer of topical products,” Tong said.
The office of Connecticut’s attorney general struck up a generics price-fixing probe in 2014 and initially sued in 2016. The plaintiffs amended that first lawsuit in 2017 and filed another action in 2019. Both of those lawsuits are pending.
The latest lawsuit is based on evidence from cooperating witnesses, “millions” of records, and notes, Tong said. The evidence paints “an undeniable picture of the largest domestic corporate cartel in our nation’s history,” he added.
In their suit last year, states sued Teva and 19 other companies over alleged price fixing on dozens of medicines. The states said Teva played a central role in the scheme, but that other companies “willingly” participated. A Teva spokeswoman said at the time the company “has not engaged in any conduct that would lead to civil or criminal liability.”
Aside from the states’ probe, the Department of Justice (DOJ) has been working through its own generics price-fixing investigation for years—and it’s already inked some settlements with companies and executives.
Last month, Apotex admitted to price fixing and agreed to pay a $24 million criminal fine in a deal with the DOJ. Before that, Sandoz struck a $195 million settlement deal. Heritage Pharmaceuticals and Rising Pharmaceuticals each inked their own settlements as well.
The DOJ has additionally secured guilty pleas from two former executives of Heritage Pharmaceuticals, plus a former Novartis exec. For its part, Teva has reportedly bowed out of settlement talks with the feds.
In a statement Wednesday, Sandoz said it “disagrees with the extremely broad claims” brought in the states’ lawsuit.
“The individual instances of misconduct at the core of the resolution we reached with the U.S. Department of Justice in March do not support the vast, systemic conspiracy the States allege,” the company added. “We take seriously our compliance with antitrust laws, and we will continue to defend ourselves in this matter.”
Aside from Sandoz, the suit names Actavis, Amneal, Aurobindo, Bausch, Fougera, Glenmark, G&W, Lannett, Lupin, Mallinckrodt, Mylan, Perrigo, Pfizer, Sun Pharmaceutical, Taro Pharmaceuticals, Wockhardt and Teligent Pharma.