Generic Drugs: Authorities Allege Hindered Justice in Pricing Inquiry

Leaders of competing generic pharmaceutical companies have suppressed SMS and worked together to coordinate responses to authorities to obstruct an investigation into an alleged price-fixing cartel, state attorneys general said Friday in a civil complaint.

The allegations are part of a broad, multi-year investigation by the Connecticut Attorney General's office into a pervasive presidential pricing system presumed by virtually all of the larger companies that sell generic drugs in the United States.

The latest lawsuit focuses on the practice sector of Teva Pharmaceuticals, the largest generic drug company in the world. The lawsuit also names several executives of Teva and other generic drug companies as individual defendants.

"The fact that the world's largest generic drug maker is one of the leaders in this frenzied deal is more than disappointing and, to a certain extent, discouraging," said Connecticut Attorney General William Tong on Friday. at the Washington Post.

"What bothers me about this case is that they are ordinary people who seem to go to work every day in big business and break the law," he said. "It's the daily routine that bothers me. It's part of the routine in this area, and it seems endemic and integral to what they do. "

Connecticut is conducting the multi-state survey since 2014. The Post announced in December that the probe had been expanded to more than 300 drugs.

Generic drugs account for approximately 90% of all prescriptions dispensed in the United States, while they represent only about 25% of the cost of prescriptions. However, consumer groups, state officials and members of Congress have expressed their indignation on several occasions in recent years, due to the inexplicable increase in the price of generic drugs.

The state investigation, described in the last complaint Friday, explains why these prices soared. State lawyers said that generic drug companies have publicly argued that the price increases were due to industry consolidation and FDA-imposed plant closings. Investigators said the real reason was "much simpler: illegal collusion between generic drug manufacturers".

According to the complaint, Teva has established a list of "high quality" competitors with whom it has collaborated. From July 2013 to January 2015, Teva has concerted with these competitors to dramatically increase the prices of at least 86 drugs, he added.

"Teva had agreed with its competitors of the highest quality to lead and track each other's price increases, and did so with a lot of frequency and success," said the complaint, "resulting in several billions of dollars in damage to the national economy over a period of several years. "

Teva, headquartered in Israel, reported revenues of $ 18.9 billion in 2019.

"Teva continues to investigate the matter internally and has not committed any conduct that could result in civil or criminal liability," Teva said Saturday.

Nisha Patel, a Teva executive who worked for the company from 2013 to 2016, traded at least 1,240 phone calls and text messages with counterparts from 16 competing generic companies, investigators said. The prosecution alleges that Patel removed some text messages after states began their investigation.

Patel could not be reached for comment.

Although the lawsuit indicates that illegally inflated prices remain in place on some drugs, the industry's trade group, the Association for Accessible Medicines, issued a statement Friday that generic drug prices have dropped overall. "We are committed to the idea that strong competition is the key to providing patients with affordable and accessible medicines while limiting the costs of healthcare," the association said.

The 465-page lawsuit – in a section entitled "Obstacles to justice" – quotes actions of rival corporate executives after Elijah E. Cummings (D-Md.) And Senator Bernie Sanders (I-Vt.) Launched a Congressional survey on generic drug prices.

"Many defendants are co-ordinating themselves in a consistent manner to hinder ongoing government investigations and limit any potential response," the lawsuit says. "This coordination dates back to at least October 2014, when Congress began investigating price increases in the generic drug industry."

The letter from the lawyer of a company is redacted from the lawsuit.