Mon, May 13, 2019 - Page 1 News List

US states bring price fixing lawsuit against drugmakers

SECRET PACT:Major drug companies are being accused of agreeing not to compete with each other and to raise prices up to 1,000 percent

AP, BOSTON

Bottles of prescription medicines ride on a conveyor belt at a pharmacy warehouse in Florence, New Jersey, on July 10 last year.

Photo: AP

Attorneys general from more than 40 US states have alleged that the nation’s largest generic drug manufacturers conspired to artificially inflate and manipulate prices for more than 100 generic drugs, including treatments for diabetes, cancer, arthritis and other medical conditions.

The lawsuit, filed in federal court in Connecticut on Friday, also names 15 individual senior executives responsible for sales, marketing and pricing.

Connecticut Attorney General William Tong said that investigators obtained evidence implicating 20 firms.

“We have hard evidence that shows the generic drug industry perpetrated a multibillion dollar fraud on the American people,” Tong said. “We have e-mails, text messages, telephone records and former company insiders that we believe will prove a multiyear conspiracy to fix prices and divide market share for huge numbers of generic drugs.”

Tong said the investigation had uncovered a primary reason why the cost of healthcare — and specifically generic prescription drugs — has been so high in the US.

The surging prices of prescription drugs have drawn the attention of a number of politicians across the political spectrum from US President Donald Trump to Democratic presidential candidate and US Senator Elizabeth Warren.

The court suit was the second that has been filed in the investigation. The first, filed in 2016, named 18 corporate defendants and two individual defendants. Two former drug company executives entered into settlement agreements and are cooperating with the attorneys general in the investigation.

The suit was filed by 43 states and Puerto Rico, with Connecticut taking the lead in the probe.

The suit alleged that for many years the makers of generic drugs had operated under an agreement not to compete with each other and to settle instead for what these companies referred to as a “fair share” of the market to avoid pushing prices down through competition.

However, by 2012, Teva and the other companies decided to “take this understanding to the next level,” it said.

It alleged that “Teva and its co-conspirators embarked on one of the most egregious and damaging price-fixing conspiracies in the history of the United States.”

The suit said that the companies sought not only to maintain their “fair share” of the generic drug market, but also to “significantly raise prices on as many drugs as possible.”

The suit contended that this resulted in “many billions of dollars of harm to the national economy over a period of several years.”

During a 19-month period beginning in July 2013, Teva significantly raised prices on approximately 112 generic drugs and on at least 86 of those drugs colluded with a group it referred to as “high-quality” competitors, it said.

The suit said that the size of the price increases varied, but was more than 1,000 percent for a number of the drugs.

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