An investigation of alleged price-fixing in the generic drug sector has grown to involve at least 16 companies and some 300 medications, according to a Connecticut official involved in the probe.
In an interview with the Washington Post , published Sunday, Joseph Nielsen, an assistant attorney general in Connecticut, said that the inquiry, which began in 2014, had greatly widened.
The news dropped stock prices for the major generic manufacturers by a few-percentage points the next day, according to MarketWatch, even though some stock analysts said they did not see much new in the Washington Post report.
The state of Connecticut began an investigation into alleged generic price-fixing in July 2014 and filed suit in December 2016. Connecticut was joined in that filing by Delaware, Florida, Hawaii, Idaho, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Minnesota, Nevada, New York, North Dakota, Ohio, Pennsylvania, Virginia, and Washington. The suit originally named Aurobindo Pharma USA, Inc; Citron Pharma, LLC; Heritage Pharmaceuticals, Inc; Mayne Pharma (USA), Inc; Mylan Pharmaceuticals, Inc; and Teva Pharmaceuticals USA, Inc as plaintiffs.
In late 2017, Connecticut, joined by attorneys general from 45 states, amended the filing to say that it was seeking to implicate 18 manufacturers in the price-setting of 15 drugs. According to the Post, the suit now includes 47 states that are suing at least 16 manufacturers for allegedly colluding on the prices of 300 drugs.
"This is most likely the largest cartel in the history of the United States," Nielsen told the Post.
Closing In on a Conspiracy?
In the original filing — which focused on doxycycline and glyburide — the states described a free-wheeling atmosphere in which executives from various generic companies agreed to divide market share in the United States and to set maximum prices for various products.
Each company would know what a rival would do when a competing product was introduced — thanks to chummy dinners, emails, texts, and phone calls, according to evidence uncovered by the state authorities.
They found that the price for doxycycline jumped from $20 for 500 pills in October 2013 to more than $1,800 in April 2014.
"As a result of the conspiracies enumerated herein, consumers nationwide paid more for numerous generic pharmaceutical drugs, including specifically Doxy DR and Glyburide, than they otherwise would have in a competitive market, and the [d]efendants illegally profited as a result," said the states, in their original suit.
Pharmacies were not happy with what had been uncovered. In January, Kroger, Albertsons, and H.E. Butt Grocery Co filed a civil antitrust suit against 35 generic companies, including such big names as Teva, Sandoz, Mylan, and Sun Pharma.
The Kroger suit cited the ongoing attorney generals’ investigation and filing, and also noted that the US Department of Justice has an ongoing criminal investigation into alleged generic price-fixing. Two former Heritage Pharmaceuticals executives pleaded guilty to federal criminal charges, and are cooperating with the Justice Department, according to the Post.
Big Money at Stake
If any of the generic companies are found guilty, the states and private pharmacies — and the federal government — could reap a big payback. The alleged excessive charges would affect insurers, Medicare, Medicaid, and individuals.
"Everyone is paying the price," Nielsen told the Post, adding that the only reason for the generic companies’ behavior was "greed."
The generic drug industry’s trade organization, the Association for Accessible Medicines (AAM), estimates that generics account for 90% of prescriptions dispensed, but account for only 23% of total drug costs.
When asked for comment on the Post story, an AAM spokesperson said, "Our association and member companies support competition and oppose price-fixing."
The organization has policies to help ensure compliance with all federal, state, and local laws, the spokesperson told Medscape Medical News. "The Washington Post article recycles years-old allegations that are inconsistent with an industry providing patients enormous measurable healthcare savings through competition," said the spokesperson, adding that generics were among the biggest bargains in healthcare. She said that 93% of generic prescriptions are filled for $20 or less.
Medscape Medical News © 2018
Cite this: Generic Drug Price-Fixing Inquiry Reportedly Widens to 300 Drugs - Medscape - Dec 11, 2018.
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