States, drug companies in court battle over price fixing

When pharmaceutical companies illegally fix prices on generic drugs, it affects nearly every consumer of those medications, experts say.

Just recently, most U.S. states and territories sued 26 drug manufacturers, alleging they conspired to reduce competition by price-fixing generic drugs.

“In all, the conduct represented a multibillion-dollar fraud that was so systemic that it has touched nearly every single consumer of topical products,” said Connecticut Attorney General William Tong in a statement. He said the suit is based on evidence from cooperating witnesses and millions of records and notes which point to “an undeniable picture of the largest domestic corporate cartel in our nation’s history.”

This is the third time state attorneys general have brought such allegations in a lawsuit against drug makers in recent years.

The latest suit, according to Reuters, accuses Novartis’ Sandoz unit, Teva Pharmaceuticals’ Actavis unit, Pfizer Inc., Mylan and other manufacturers of conspiring to rig the generic drug market between 2009 and 2016 for more than 80 drugs.

“Attorneys general from 46 states, the District of Columbia and four U.S. territories said the defendants prioritized profit over the public interest, depriving millions of consumers of lower prices for needed medication,” the Reuters article states.

Ten drug company executives are also defendants in the case, initially filed in Connecticut.

Drug company executives used phone calls, text messages, emails, and social gatherings to “fix prices and restrain competition as though it were a standard course of business, Tong said.

Brand name drugs affected include the anti-seizure medicine Dilantin, the anti-fungal cream Lotrimin AF Cream, Xalatan for glaucoma, Differin for acne and Ritalin, for attention deficit disorder.

This is only the latest claim of price-fixing by big pharma.

Earlier this month, according to the New York Times, the Justice Department said a generic drug manufacturer admitted to fixing the price of cholesterol drug pravastatin.

The company, Apotex, agreed to pay $24.1 million as part of the Justice Department’s crackdown on price fixing and bid rigging.

Price fixing drives up the cost of generic medicines that should have lower prices so more people can afford them. The Apotex case is an example of how significant price increases can occur in such instances, affecting consumers and government programs like Medicare.

The Patient Advocate Foundation, which offers financial assistance to people who need it for medications, sees price fixing as a real problem.

“We are an organization that gives financial aid to patients who need it,” said Caitlin Donovan, senior director for Patient Advocate Foundation. “We write a lot of $5 checks. There are patients for whom a dollar increase is too much. It has a profound effect on their treatment and on their ability to afford basic life necessities like food and shelter.”

Her nonprofit hears from people who have trouble affording everything, she said.

“It’s a shame, this whole thing. The promise of generic drugs is that it makes lifesaving medications affordable and accessible,” Donovan said. “The idea that companies would be in cahoots with each other is heartbreaking.”

The type of conspiracy alleged in these lawsuits has been illegal for more than 100 years. 

“There’s one simple reason that drug companies still engage in it: greed,” said Minnesota Attorney General Ellison, whose state joined the latest suit. “While they lined their pockets, Minnesotans and Americans who suffered from the conditions these drugs are designed to treat emptied theirs. I’m taking these corporations to court for making it harder for Minnesotans to afford their lives and live with basic dignity and respect,” he added, according to Minnesota-based Red Lake Nation News.

Back in February, an executive with the Novartis subsidiary of Sandoz pleaded guilty to federal charges he conspired to fix generic drug prices between 2013 and 2015. He faces up to 10 years in federal prison and a $1 million fine.