World Media

Generic drug companies, executives slapped with price-fixing lawsuit

Teva Pharmaceutical Industries

Alabama is one of more than 40 states to have filed a suit against a host of drug makers accusing them of artificially inflating and manipulating prices and conspiring to reduce competition.

Connecticut Attorney General William Tong, a Democrat, said investigators obtained emails, text messages and telephone records to prove a multi-year conspiracy against 20 firms.

Teva Pharmaceutical Industries, the Israeli multinational company headquartered in Petah Tikva, which has been plagued with a net financial debt of $26.7 billion, a 56% drop in the sales of its Copaxone-an immunomodulator medication used to treat multiple sclerosis, the collapse of its cash flow, and the slow growth of the drugs that were supposed to replace the lost revenues from Copaxone-all of which already threaten its very existence-is now facing two devastating lawsuits filed against it in the US.

"Typically, when the first generic manufacturer enters a market for a given drug, the manufacturer prices its product slightly lower than the brand-name manufacturer".

The suit, in the U.S. District Court for the District of CT, includes 43 states and Puerto Rico - led by CT - and Israel-based Teva Pharmaceutical Industries, along with more than a dozen other generic drugmakers.

A lawsuit filed in a federal court on Friday alleges that several generic drug companies conspired to fix prices, resulting in often dramatic price increases for their products.

The suit says that in 2012, companies made a decision to "take this understanding to the next level", embarking on "one of the most egregious and damaging price-fixing conspiracies in the history of the United States".

You can see a complete lists of the states filing suit and the drug makers here.

"We all know that prescription drugs can be expensive", said New Jersey Attorney General Gurbir S. Grewal in a statement.

The allegations include drug companies and their executives were not only involved in a price-fixing scheme, but were aware their alleged actions were illegal.

A spokesman for Teva Pharmaceuticals, one of the companies named in the suit, said Teva hasn't engaged in any conduct that would lead to civil or criminal liability.

Likewise, Pfizer issued a statement Saturday saying its generic-producing subsidiary, Greenstone, "has been a reliable and trusted supplier of affordable generic medicines for decades and intends to vigorously defend against these claims". "The company delivers high-quality medicines to patients around the world and is committed to complying with all applicable laws and regulations in doing so".

The suit says that the size of the price increases varied but was over 1,000 percent for a number of the drugs.

This is the second lawsuit to be filed in connection with the investigation launched in 2014.