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40 states join suit claiming generic drugmakers conspired to manipulate prices

The companies allegedly met secretly to agree on pricing

Photo (c) Ahasoft - Fotolia
Forty states are alleging that generic drug companies have conspired to artifically drive up the cost of their products, up from the 20 states that originally banded together to pursue the action.

"The anticompetitive actions that we allege in this complaint are egregious and, ultimately, consumers, businesses and taxpayers paid the price," said Connecticut Attorney General George Jepsen, who assembled the 40-state coalition.

The amended complaint adds claims of alleged violations of state antitrust laws – in addition to earlier alleged violations of federal antitrust laws – in each of the 40 states, as well as state consumer protection laws in most of the states, against the defendant generic companies Heritage Pharmaceuticals, Inc., Aurobindo Pharma USA, Inc., Citron Pharma, LLC, Mayne Pharma (USA), Inc., Mylan Pharmaceuticals, Inc. and Teva Pharmaceuticals USA, Inc.

In July 2014, the state of Connecticut opened an investigation of the reasons behind suspicious price increases of certain generic pharmaceuticals. The investigation uncovered evidence of a well-coordinated and long-running conspiracy to fix prices and allocate markets for doxycycline hyclate delayed release, an antibiotic, and glyburide, an oral diabetes medication, Jepsen said.

The complaint further alleges that the defendants routinely coordinated their schemes through direct interaction with their competitors at industry trade shows, customer conferences, and other events, as well as through direct email, phone, and text message communications.

The alleged anticompetitive conduct – including efforts to fix and maintain prices, allocate markets, and otherwise thwart competition – caused significant, harmful and continuing effects in the country’s healthcare system, the states allege.

The lawsuit was filed under seal in the U.S. District Court for the District of Connecticut.

States joining Connecticut in filing the action are Alabama, Arizona, California, Colorado, Delaware, Florida, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Montana, Nebraska, Nevada, New Hampshire, New Jersey, New York, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, South Carolina, Tennessee, Utah, Vermont, Virginia, Washington, and Wisconsin.

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