Antitrust lawsuit against generic drug manufacturers

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Michigan Attorney General Dana Nessel joined a coalition of 44 attorneys general in announcing 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 in U.S. District Court for the District of Connecticut, seeks damages, civil penalties and actions by the court to restore competition to the generic drug market.

The lawsuit also names 15 individual senior executive defendants at the heart of the alleged conspiracy who were responsible for sales, marketing, pricing and operations. The defendants’ drugs account for billions of dollars in sales in the country, and the alleged schemes increased prices affecting the health insurance market, taxpayer-funded health care programs like Medicare and Medicaid, and individuals who must pay artificially inflated prices for their prescription drugs.

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, anti-depressants, contraceptives, non-steroidal anti-inflammatory drugs, and treat a range of diseases and conditions from basic infections to diabetes, cancer, epilepsy, multiple sclerosis, HIV, ADHD, and more. In some instances, the coordinated price increases were more than 1,000 percent.

The complaint outlines an interconnected web of industry executives who met with each other during industry dinners, lunches, cocktail parties, golf outings and communicated via frequent phone calls, emails and texts to sow 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.

“Each day, people across the U.S. turn to generic drugs as an affordable alternative to name-brand medication,” Nessel said. “Michigan patients count on drug manufacturers to keep their prices affordable for life-saving medications. And when they don’t, when they collude to raise prices and line their pockets at the expense of the health and well-being of our residents, my office will hold them accountable.”

This is the second complaint to be filed in an ongoing and expanding investigation that has been referred to as possibly the largest cartel case in the history of the United States. 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.

In addition to Michigan, Alabama, Alaska, Arizona, Colorado, Connecticut, Delaware, Florida, Georgia, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New Jersey, New Mexico, New York, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina, Tennessee, Utah, Vermont, Virginia, Washington, West Virginia, Wisconsin and Puerto Rico joined the suit.

Corporate Defendants

Teva Pharmaceuticals USA, Inc.
Sandoz, Inc.
Mylan Pharmaceuticals Inc.
Actavis Holdco US, Inc.
Actavis Pharma, Inc.
Amneal Pharmaceuticals, Inc.
Apotex Corp.
Aurobindo Pharma U.S.A., Inc.
Breckenridge Pharmaceutical, Inc.
Dr. Reddy’s Laboratories, Inc.
Glenmark Pharmaceuticals Inc. USA
Greenstone LLC
Lannett Company, Inc.
Lupin Pharmaceuticals, Inc.
Par Pharmaceutical Companies, Inc.
Pfizer, Inc.
Taro Pharmaceuticals USA, Inc.
Upsher-Smith Laboratories, LLC
Wockhardt USA, LLC
Zydus Pharmaceuticals (USA), Inc.

Individual defendants

Ara Aprahamian, Vice President of Sales and Marketing at Taro Pharmaceuticals U.S.A, Inc.  
David Berthold, Vice President of Sales at Lupin Pharmaceuticals, Inc. 
James Brown, Vice President of Sales at Glenmark Pharmaceuticals, Inc.
Maureen Cavanaugh, former Senior Vice President and Chief Commercial Officer, North America, for Teva
Marc Falkin, former Vice President, Marketing, Pricing and Contracts at Actavis
James Grauso, former Senior Vice President, Commercial Operations for Aurobindo from December 2011 through January 2014. Since February 2014, Grauso has been employed as the Executive Vice President, N.A. Commercial Operations at Glenmark
Kevin Green, former Director of National Accounts at Teva from January 2006 through October 2013.  Since November 2013, Green has worked at Zydus Pharmaceuticals (USA) Inc. as the Vice President of Sales
Armando Kellum, former Vice President, Contracting and Business Analytics at Sandoz
Jill Nailor, Senior Director of Sales and National Accounts at Greenstone
James Nesta, Vice President of Sales at Mylan
Kon Ostaficiuk, the President of Camber Pharmaceuticals, Inc.
Nisha Patel, former Director of Strategic Customer Marketing and later, Director of National Accounts at Teva.
David Rekenthaler, former Vice President, Sales US Generics at Teva
Richard Rogerson, former Executive Director of Pricing and Business Analytics at Actavis
Tracy Sullivan DiValerio, Director of National Accounts at Lannett

Drugs listed in the complaint as subject to price-fixing and market allocation agreements:

Adapalene Gel
Amiloride HCL/HCTZ Tablets
Amoxicillin/Clavulanate Chewable Tablets
Amphetamine/Dextroamphetamine ER (aka Mixed Amphetamine Salts)
Amphetamine/Dextroamphetamine IR
Azithromycin Oral Suspension
Azithromycin Suspension
Baclofen Tablets
Benazepril HCTZ
Bethanechol Chloride Tablets
Budesonide DR Capsules
Budesonide Inhalation
Bumetanide Tablets
Buspirone Hydrochloride Tablets
Carbamazepine Chewable Tablets
Carbamazepine Tablets
Cefdinir Capsules
Cefdinir Oral Suspension
Cefprozil Tablets
Cephalexin Suspension
Cimetidine Tablets
Ciprofloxacin Tablets
Clarithromycin ER Tablets
Clemastine Fumarate Tablets
Clomipramine HCL
Clonidine TTS Patch
Clotrimazole Topical Solution
Cyproheptadine HCL Tablets
Desmopressin Acetate Tablets
Desogestrel/Ethinyl Estradiol Tablets (Kariva)
Dextroamphetamine Sulfate ER
Diclofenac Potassium Tablets
Dicloxacillin Sodium Capsules
Diflunisal Tablets
Diltiazem HCL Tablets
Disopyramide Phosphate Capsules
Doxazosin Mesylate Tablets
Drospirenone and ethinyl estradiol (Ocella)
Enalapril Maleate Tablets
Epitol Tablets
Estazolam Tablets
Estradiol Tablets
Ethinyl estradiol and levonorgestrel (Portia and Jolessa) 
Ethosuximide Capsules
Ethosuximide Oral Solution
Etodolac ER Tablets
Etodolac Tablets
Fluconazole Tablets
Fluocinonide Cream
Fluocinonide Emolient Cream
Fluocinonide Gel
Fluocinonide Ointment
Fluoxetine HCL Tablets
Flurbiprofen Tablets
Flutamide Capsules
Fluvastatin Sodium Capsules
Gabapentin Tablets
Glimepiride Tablets
Griseofulvin Suspension
Hydroxyurea Capsules
Hydroxyzine Pamoate Capsules
Ketoconazole Cream
Ketoconazole Tablets
Ketoprofen Capsules
Ketorolac Tromethamine Tablets
Labetalol HCL Tablets
Lamivudine/Zidovudine (generic Combivir) 
Loperamide HCL Capsules
Medroxyprogesterone Tablets
Methotrexate Tablets
Mimvey (Estradiol/Noreth) Tablets
Moexipril HCL Tablets
Moexipril HCL/HCTZ Tablets
Nabumetone Tablets
Nadolol Tablets
Niacin ER Tablets
Nitrofurantoin MAC Capsules
Norethindrone/ethinyl estradiol (Balziva)
Northindrone Acetate
Nortriptylline Hydrochloride Capsules
Omega-3-Acid Ethyl Esters
Oxaprozin Tablets
Oxybutynin Chloride Tablets
Penicillin VK Tablets
Pentoxifylline Tablets
Pravastatin Sodium Tablets
Prazosin HCL Capsules
Prochlorperazine Tablets
Propranolol HCL Tablets
Raloxifine HCL Tablets
Ranitidine HCL Tablets
Tamoxifen Citrate Tablets
Tolmetin Sodium Capsules
Tolterodine ER
Tolterodine Tartrate
Topiramate Sprinkle Capsules
Trifluoperazine HCL
Valsartan HCTZ
Warfarin Sodium Tablets

Today Governor Gretchen Whitmer released the following statement applauding Attorney General Dana Nessel’s decision to join a coalition of 44 attorneys general in a lawsuit against 19 generic drug manufacturers alleging that they conspired to artificially inflate and manipulate generic drug prices:

“If these companies abused their power to take money out of the pockets of hardworking Michiganders who rely on generic drugs every day, they must be held accountable,” said Gov. Whitmer. “Nobody should have to choose between buying medication and paying rent. That’s why I applaud the attorney general’s decision to join this lawsuit, and I hope that it deters companies across the country from manipulating their prices. We still have more work to do to lower drug prices here in Michigan, and I look forward to working with Attorney General Nessel and everyone else who wants to help.”

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