20 states charge price fixing in lawsuit against makers of generic drugs

WASHINGTON — Connecticut and 19 other states, including Nevada, filed a lawsuit on Thursday against Mylan NV, Teva Pharmaceuticals and four other generic drug makers saying they entered into illegal conspiracies that raised prices on two common generic drugs, the New York state attorney general’s office said in a statement.

The civil lawsuit is one piece of broader generic drug pricing probe underway on the state and federal level, as well as in the U.S. Congress. It has grown over the past two years to include multiple drugs and companies, some of which have disclosed they are being investigated by the U.S. Justice Department.

The drugs involved in Thursday’s lawsuit are the delayed release version of a common antibiotic, doxycycline hyclate, and glyburide, an older drug used to treat diabetes.

The lawsuit, filed in the U.S. District Court for the District of Connecticut, also names Australian drugmaker Mayne Pharma, Heritage Pharmaceuticals Inc, Aurobindo Pharma and Citron Pharma LLC.

The lawsuit characterized Heritage as the “principal architect and ringleader” that helped organize a “wide-ranging series of conspiracies” to fix prices.

It alleges that top executives of the drug companies and their sales executives propped up the prices of the two drugs by fixing their prices or allocating markets, the New York attorney general’s office said in the statement.

The states also say in their lawsuit that executives knew that the conduct was illegal and either deleted emails or made efforts to avoid communicating in writing.

“Companies that collude and fix prices for generic drugs in order to pad their profits must be held accountable for the very real harm they inflict on New Yorkers’ ability to pay for life-saving medications,” New York Attorney General Eric Schneiderman said in a statement.

Nevada Attorney General Paul Laxalt said in a statement, “Generic drugs account for 88 percent of all prescriptions written in the U.S., and are intended to save customers and our health-care system billions of dollars every year. However, when drug-makers allegedly conspire together, this undermines legitimate competition.

“In joining this lawsuit, we are holding these companies accountable for their anticompetitive practices that harmed our country’s healthcare system and consumers.”

The state attorneys’ investigation into drug price fixing found evidence of broad, well-coordinated schemes on a number of generic drugs and is ongoing, according to the complaint.

The U.S. Department of Justice filed a lawsuit this week against two former Heritage executives alleging that they colluded to fix the prices of doxycycline hyclate, and to split up the market for glyburide. Heritage has sued the men in the Justice lawsuit and accused them to engaging in misconduct.

Generic drug pricing became an issue in 2014, driven in large part by media reports of sharply rising drug prices, and Congress opened an investigation.

The lead state in the probe was Connecticut and the other states involved are Delaware, Florida, Hawaii, Idaho, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Minnesota, Nevada, New York, North Dakota, Ohio, Pennsylvania, Virginia and Washington.