26 Generic Drugmakers Accused of Price-Fixing, ‘Multibillion-Dollar Fraud’
Health Care

26 Generic Drugmakers Accused of Price-Fixing, ‘Multibillion-Dollar Fraud’

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A coalition of attorneys general from nearly every state filed a massive lawsuit Wednesday charging 26 generic drug companies and 10 executives of conspiring to reduce competition and raise prices. The lawsuit by 46 states, four territories and the District of Columbia is the third in an ongoing antitrust investigation. It accuses the manufacturers of secretly agreeing to fix prices of more than 80 prescription creams, ointments and tablets from at least 2009 through early 2016.

Brand names of some of the drugs allegedly involved in the schemes include Dilantin, an anti-seizure medicine; Lotrimin AF Cream, an antifungal; and Ritalin, a treatment for attention deficit disorder.

 “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,” Connecticut Attorney General William Tong said in a statement. “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.”

Tong said the plaintiffs’ case is built on evidence from cooperating witnesses, phone records, notes and a database of more than 20 million documents and call records “that paint an undeniable picture of the largest domestic corporate cartel in our nation’s history.”

Health insurer Cigna filed its own lawsuit this week, alleging that price fixing by the companies led to “overcharges” and has caused “significant harm” to the nation’s health care system.

A number of the major drugmakers named in the suit denied have unlawful conduct or price fixing. A Novartis subsidiary named in the new suit agreed in March to pay $195 million to settle price-fixing and other charges “The individual instances of misconduct at the core of the resolution we reached with the U.S. Department of Justice in March do not support the vast, systemic conspiracy the States allege,” Novartis said Wednesday. “We take seriously our compliance with antitrust laws, and we will continue to defend ourselves in this matter.”