Connecticut Expands Anti-Trust Lawsuit Against Generic Drug Industry
HARTFORD, CT — The anti-trust lawsuit Connecticut Attorney General George Jepsen and 45 other attorneys general filed last year against the $75 billion generic drug industry has expanded to include 20 defendants and at least 15 drugs.
Also for the first time, the states are suing senior executives at two generic drug companies. Rajiv Malik, president and executive director of Mylan who also serves on the company’s board of directors, and Satish Mehta, the chief executive officer of Emcure Pharmaceuticals, were both named as defendants in the civil complaint along with their companies.
In the expanded 243-page complaint, which was transferred from Connecticut to a multidistrict docket in Pennsylvania, the states allege a number of specific agreements among the defendants to fix prices and allocate customers for at least 15 generic drugs.
However, Jepsen said the case could be expanded even further depending on what happens with discovery, which has been put on hold while the U.S. Department of Justice seeks to wrap up its criminal case against some of the same defendants.
The 15 drugs manufactured by 18 companies make everything from Doxycycline, which is a delayed release antibiotic, to Acetazolamide, which is used to treat glaucoma and epilepsy.
Jepsen said generic drugs account for approximately 88 percent of all prescriptions written in the United States.
The price-fixing investigation started in July 2014. Because the probe remains ongoing, portions of the complaint, including text messages between top executives and sales reps, are redacted.
“The price-fixing is systematic. It is pervasive and that a culture of collusion exists within the industry,” Jepsen said Tuesday during a press conference in his office.
The complaint says many of the generic drug manufacturers are concentrated in New Jersey and eastern Pennsylvania, giving them additional opportunities to foster connections and meet and collude beyond the trade shows and conferences, as well as through email and text messages.
“For example, in January 2014, at a time when the prices of a number of generic drugs were reportedly soaring, at least thirteen (13) high-ranking rnale executives, including CEOs, Presidents and Senior Vice Presidents of various generic drug manufacturers, met at a steakhouse in Bridgewater, New Jersey,” the complaint states.
The complaint goes on to explain how “female generic pharmaceutical sales representatives also get together regularly for what they refer to as a ‘Girls Night Out’ (GNO), or alternatively ‘Women in the Industry’ meetings and dinners.”
“During these GNOs, meetings and dinners, these representatives meet with their competitors and discuss competitively sensitive information,” the complaint continues.
The complaint says the defendants “actively monitor and track each others’ fair share, and discuss it with each other in the context of agreements on specific drugs.”
The complaints states that “If even one competitor is not aware of (and behaving in accordance with) the larger understanding, it can lead to unwanted competition and lower prices.”
In a statement on its website, Mylan, one of the defendant companies said there is no evidence to back up the allegations.
“Our review of the Connecticut Attorney General’s press release underpinning the complaint does not change our views,” the company stated. “We have asked the various attorneys general leading this case to share with us what information they believe supports these new allegations and, to date, they have not done so. Mylan has deep faith in the integrity of its President, Rajiv Malik, and stands behind him fully. Mylan and Rajiv Malik both intend to defend this case vigorously, and we look forward to the opportunity to present a full defense.”
It added: “Mylan takes its legal obligations seriously and operates with the highest levels of integrity and character. Mylan expects to have no further comment while the matter is pending.”
Meanwhile, the Department of Justice has successfully argued in favor of a stay on discovery in the attorney general’s case for another six months.
Assistant Attorney General Joseph Nielson said they believe it could potentially harm their ongoing criminal investigation because it would give defendants access to information they might normally not have access to in a criminal proceeding.
In addition to Connecticut the plaintiff’s include Alabama, Alaska, Arizona, Arkansas, California, Colorado, Delaware, Florida, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Louisiana, Maine, Maryland, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico, New York, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, South Carolina, Tennessee, Utah, Vermont, Washington, West Virginia and Wisconsin, the Commonwealths of Kentucky, Massachusetts, Pennsylvania, Puerto Rico and Virginia, and the District of Columbia.
The defendants include Actavis Holdco U.S., Inc., Actavis Pharma, Inc., Ascend Laboratories, LLC, Apotex Corp., Aurobindo Pharma USA, Inc., Citron Pharma, LLC, Dr. Reddy’s Laboratories, Inc., Emcure Pharmaceuticals, Ltd., Glenmark Pharmaceuticals, Inc., Heritage Pharmaceuticals, Inc., Lannett Company, Inc., Rajiv Malik, Mayne Pharma, Inc., Satish Mehta, Mylan Pharmaceuticals, Inc., Par Pharmaceutical Companies, Inc., Sandoz, Inc., Sun Pharmaceutical Industries, Inc., Teva Pharmaceuticals USA, Inc., and Zydus Pharmaceuticals (USA), Inc.