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Former Pharma Executives Settle With States

by | May 29, 2017 5:30am
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Posted to: Courts, Health Care, Legal

Pavel Kubarkov via shutterstock

Two former executives of a New Jersey-based drugmaker have entered into agreements with Connecticut and 40 other states to cooperate in an ongoing antitrust investigation.

Jason Malek, former president of Heritage Pharmaceuticals Inc., and Jeffrey Glazer, former chairman and CEO of the same company, have reached settlement agreements in which they will help the states in ongoing litigation and investigation, said state Attorney General George Jepsen.

Nearly three years ago, in July 2014, Connecticut began investigating the reasons behind dramatic price increases on certain generic medications. Connecticut continues to lead the investigation, which is examining various generic drugs, pharmaceutical companies, and key executives. It already has resulted in a lawsuit against six generic drug makers, alleging a “well-coordinated and long-running conspiracy to fix prices and allocate markets” for the antibiotic doxycycline hyclate and diabetes medication glyburide, Jepsen said.

Heritage Pharmaceuticals is a defendant in the states’ litigation. A spokeswoman for the company said officials had no comment on the matter.

Glazer and Malek entered plea agreements with the U.S. Department of Justice in December, after they were charged with two counts of criminal violations of the Sherman Antitrust Act. They are to be sentenced on those charges in September.

In addition to cooperating with the states’ investigation, Glazer and Malek will each pay a $25,000 civil penalty to the states.

Their cooperation should have a major impact on the investigation, according to Jepsen.

“We have alleged in our lawsuit that executives with Heritage Pharmaceuticals played a major role in these illegal conspiracies, and we fully expect the agreements we have reached with Mr. Glazer and Mr. Malek — and the evidence they will provide to our working group — will significantly strengthen our ability to prosecute the litigation and further our investigation,” Jepsen said in a statement.

He continued: “Ultimately, it was consumers, taxpayers, and indeed our healthcare system as a whole, who unwittingly paid for these actions through artificially high prices for generic drugs.”

Glazer has been CEO of Heritage since he founded the company in 2005. He sold the company to Emcure Pharmaceuticals, a generic drug maker in India, in 2011.

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