Third lawsuit filed against 26 generic drugmakers in US court

By: |
June 12, 2020 1:45 AM

The first complaint, still pending in the US District Court in the Eastern District of Pennsylvania, was filed in 2016 and the second complaint is also pending in the US District Court in the Eastern District of Pennsylvania, filed in 2019.

The lawsuit seeks damages, civil penalties and actions by the court to restore competition to the generic drug market,’’ the office of the attorney-general, Connecticut, said in a statement.

As part of an ongoing investigation, a third complaint has been filed in the US District Court for Connecticut against 26 drug manufacturers, including Aurobindo Pharma, Sun Pharma, Glenmark, Wockhardt and Lupin among others, accusing them of conspiring to reduce competition and drive up generic drug prices. The lawsuit follows similar cases over generic drug prices brought in 2016 and 2019. The first complaint, still pending in the US District Court in the Eastern District of Pennsylvania, was filed in 2016 and the second complaint is also pending in the US District Court in the Eastern District of Pennsylvania, filed in 2019.

“Attorney General William Tong led a coalition of 51 states and territories in filing the third lawsuit stemming from the ongoing anti-trust investigation into a widespread conspiracy by generic drug manufacturers to artificially inflate and manipulate prices, reduce competition and unreasonably restrain trade for generic drugs sold across the US.

This new complaint, filed in the US District Court for the District of Connecticut, focuses on 80 topical generic drugs that account for billions of dollars of sales in the US. The complaint names 26 corporate defendants and 10 individual defendants. The lawsuit seeks damages, civil penalties and actions by the court to restore competition to the generic drug market,’’ the office of the attorney-general, Connecticut, said in a statement.

The topical drugs at the centre of the complaint include creams, gels, lotions, ointments, shampoos and solutions used to treat a variety of skin conditions, pain and allergies. “These generic drug manufacturers perpetrated a multibillion-dollar fraud on the American public so systemic that it has touched nearly every single consumer of topical products. Through phone calls, text messages, emails, corporate conventions and cozy dinner parties, generic pharmaceutical executives were in constant communication, colluding to fix prices and restrain competition as though it were a standard course of business.

But they knew what they were doing was wrong, and they took steps to evade accountability, using code words and warning each other to avoid email and detection. Our case is built on hard evidence from multiple cooperating witnesses, millions of records, and contemporaneous notes that paint an undeniable picture of the largest domestic corporate cartel in our nation’s history. Our investigation is ongoing and expanding and we will not rest until competition is restored and those responsible are held fully accountable,” attorney-general Tong said.

The complaint stems from an ongoing investigation built on evidence from several cooperating witnesses at the core of the conspiracy, a massive document database of over 20 million documents and a phone records database containing millions of call detail records and contact information for over 600 sales and pricing individuals in the generics industry. Among the records obtained by the states is a two-volume notebook containing the contemporaneous notes of one of the States’ cooperators that memorialized his discussions during phone calls with competitors and internal company meetings over a period of several years.

Between 2007 and 2014, three generic drug manufacturers, Taro, Perrigo and Fougera (now Sandoz) sold nearly two-thirds of all generic topical products dispensed in the US. The multistate investigation has uncovered comprehensive, direct evidence of unlawful agreements to minimise competition and raise prices on dozens of topical products. The complaint alleges longstanding agreements among manufacturers to ensure a ‘fair share’ of the market for each competitor and to prevent ‘price erosion’ due to competition.

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