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Daily Court Reporter - News Yost joins lawsuit against 20 generic drug manufacturers in conspiracy to fix prices for more than 100 generic drugs

 

Yost joins lawsuit against 20 generic drug manufacturers in conspiracy to fix prices for more than 100 generic drugs

Attorney General Dave Yost joined 44 states in announcing an antitrust lawsuit against 20 of the nation's largest generic drug manufacturers alleging a broad conspiracy to artificially inflate and manipulate prices, reduce competition and unreasonably restrain trade for more than 100 different generic drugs.

The drugs at issue account for billions of dollars of sales in the United States, and the alleged schemes increased prices affecting the health insurance market, taxpayer-funded healthcare programs like Medicare and Medicaid, and individuals who must pay artificially-inflated prices for their prescriptions drugs.

“Ohioans who need medicine might think generic drugs would be their cheapest option – but some manufacturers have rigged the systems to avoid competition,” Yost said. “That's not how a free market works, and the conspiracy to avoid competition makes prices higher – and it’s against the law. This lawsuit is the prescription for lower medicine prices in a free market.”

The lawsuit, filed in U.S. District Court for the District of Connecticut, also names 15 individual senior executive defendants at the heart of the conspiracy who were responsible for sales, marketing, pricing and operations.

The complaint alleges that Teva, Sandoz, Mylan, Pfizer and 16 other generic drug manufacturers engaged in a broad, coordinated and systematic campaign to conspire with each other to fix prices, allocate markets and rig bids for more than 100 different generic drugs. The drugs span all types, including tablets, capsules, suspensions, creams, gels, ointments, and classes, including statins, ace inhibitors, beta blockers, antibiotics, anti-depressants, contraceptives, non-steroidal anti-inflammatory drugs, and treat a range of diseases and conditions from basic infections to diabetes, cancer, epilepsy, multiple sclerosis, HIV, ADHD, and more. In some instances, the coordinated price increases were over 1,000%.

The complaint lays out an interconnected web of industry executives where these competitors met with each other during industry dinners, "girls nights out," lunches, cocktail parties, golf outings and communicated via frequent telephone calls, emails and text messages that sowed the seeds for their illegal agreements. Throughout the complaint, defendants use terms like "fair share," "playing nice in the sandbox," and "responsible competitor" to describe how they unlawfully discouraged competition, raised prices and enforced an ingrained culture of collusion.

The lawsuit seeks damages, civil penalties and actions by the court to restore competition to the generic drug market.

The complaint is the second to be filed in an ongoing, expanding investigation that the Connecticut Office of the Attorney General has referred to as possibly the largest cartel case in the history of the United States. The first complaint, still pending in U.S. District Court in the Eastern District of Pennsylvania, was filed in 2016 and now includes 18 corporate defendants, two individual defendants, and 15 generic drugs.

Corporate Defendants

Teva Pharmaceuticals USA, Inc.

Sandoz, Inc.

Mylan Pharmaceuticals Inc.

Actavis Holdco US, Inc.

Actavis Pharma, Inc.

Amneal Pharmaceuticals, Inc.

Apotex Corp.

Aurobindo Pharma U.S.A., Inc.

Breckenridge Pharmaceutical, Inc.

Dr. Reddy’s Laboratories, Inc.

Glenmark Pharmaceuticals Inc. USA

Greenstone LLC

Lannett Company, Inc.

Lupin Pharmaceuticals, Inc.

Par Pharmaceutical Companies, Inc.

Pfizer, Inc.

Taro Pharmaceuticals USA, Inc.

Upsher-Smith Laboratories, LLC

Wockhardt USA, LLC

Zydus Pharmaceuticals (USA), Inc.

Individual Defendants

Ara Aprahamian, Vice President of Sales and Marketing at Taro Pharmaceuticals U.S.A, Inc.

David Berthold, Vice President of Sales at Lupin Pharmaceuticals, Inc.

James Brown, Vice President of Sales at Glenmark Pharmaceuticals, Inc.

Maureen Cavanaugh, former Senior Vice President and Chief Commercial Officer, North America, for Teva

Marc Falkin, former Vice President, Marketing, Pricing and Contracts at Actavis

James Grauso, former Senior Vice President, Commercial Operations for Aurobindo from December 2011 through January 2014. Since February 2014, Grauso has been employed as the Executive Vice President, N.A. Commercial Operations at Glenmark

Kevin Green, former Director of National Accounts at Teva from January 2006 through October 2013. Since November 2013, Green has worked at Zydus Pharmaceuticals (USA) Inc. as the Vice President of Sales

Armando Kellum, former Vice President, Contracting and Business Analytics at Sandoz

Jill Nailor, Senior Director of Sales and National Accounts at Greenstone

James Nesta, Vice President of Sales at Mylan

Kon Ostaficiuk, the President of Camber Pharmaceuticals, Inc.

Nisha Patel, former Director of Strategic Customer Marketing and later, Director of National Accounts at Teva.

David Rekenthaler, former Vice President, Sales US Generics at Teva

Richard Rogerson, former Executive Director of Pricing and Business Analytics at Actavis

Tracy Sullivan DiValerio, Director of National Accounts at Lannett

About the Ohio Attorney General's Office

By law, the Attorney General is the chief law officer for the state of Ohio. We protect Ohio families from predatory financial practices through our enforcement authority in the areas of consumer protection, antitrust, charitable organizations, and health care fraud.

We support the important work of local law enforcement agencies by training officers at the Ohio Peace Officer Training Academy. Experts at our Bureau of Criminal Identification and Investigation analyze DNA, fingerprints, and other evidence. The Organized Crime Investigations Commission and the Ohio Law Enforcement Gateway provide additional resources to crack complex cases. We directly enforce Ohio’s environmental laws.

By advocating Ohio’s strong open government laws, we promote accountability, providing ongoing training in public records and open meetings. Our Internal Audit division has unfettered access to ensure that our own policies and procedures are followed properly, so the spotlight of inquiry is also upon us at all times.

We offer services to protect the most vulnerable citizens among us, including children, the elderly, victims of crime and those who are preyed upon by greed in its many forms: unfair, illegal or shady business practices, criminal conduct and abuse of power and corruption. We have many programs to support veterans, active duty military, and their families.

Date Published: May 31, 2019

 

Ohio Attorney General's Office

 

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