South Carolina is now one of 40 states to accuse six drug-makers of conspiring to inflate prices and fix the market for two generic drugs used to treat infections and diabetes, in a federal lawsuit.
Attorney General Alan Wilson announced Sunday that the Palmetto State backs the claims echoed nationwide that the companies “entered into illegal conspiracies in order to unreasonably restrain trade, artificially inflate and manipulate prices and reduce competition.”
The complaint accuses Heritage Pharmaceuticals, Inc., Aurobindo Pharma USA, Inc., Citron Pharma, LLC, Mayne Pharma (USA), Inc., Mylan Pharmaceuticals, Inc. and Teva Pharmaceuticals USA, Inc., of shady deals that caused the price of the drugs to skyrocket “sparking outrage from public officials, payers and consumers across the country.”
The complaint was initially filed by Connecticut in December 2016, following a 2014 probe into the companies’ actions. The investigation continues and as it does, the number of plaintiffs continues to grow.
Prices for dozens of generic drugs have uncharacteristically risen -- some have skyrocketed -- for no apparent reason...
States allege in federal complaint
An amended complaint filed March 1 revealed 40 plaintiff states have now joined the legal action, which accuses the pharmaceutical companies of violating federal and state antitrust laws and consumer protection laws in several territories.
“South Carolinians have been unjustly victimized by large pharmaceutical companies looking to take advantage of their medical needs,” Wilson said in his release. “I am proud to join my fellow state attorneys general in exposing these companies for this long-running conspiracy to fix prices and allocate markets for these medications.”
The drugs in question are doxycycline hyclate delayed release, an antibiotic, and glyburide, an oral diabetes medication, according to the lawsuit.
The complaint alleges that the companies routinely coordinated their schemes through direct interaction with their competitors at industry trade shows, customer conferences and other events, as well as through direct email, phone and text message communications. The alleged anti-competitive conduct – including efforts to fix and maintain prices, allocate markets and otherwise thwart competition – caused significant, harmful and continuing effects in the country’s healthcare system, the states allege.
“When a high-priced branded drug comes off patent, generic drugs offer the prospect of lower prices and greater access to healthcare for all consumers,” the complaint states. “Typically, when the first generic manufacturer enters a market, the manufacturer prices its product slightly lower than the brand-name manufacturer. … As additional generic manufacturers market the product, the prices continue to fall, but at a slower rate.”
The complaint says that didn’t happen with the drugs in this case.
South Carolinians have been unjustly victimized by large pharmaceutical companies looking to take advantage of their medical needs.
Alan Wilson, South Carolina Attorney General
“Prices for dozens of generic drugs have uncharacteristically risen – some have skyrocketed – for no apparent reason, sparking outrage from public officials, payers and consumers across the country whose costs have doubled, tripled or in some cases increased up to 1,000 percent or more,” the complaint states.
Connecticut’s investigation began in July 2014. It was shortly followed by a Congressional inquiry and a reported criminal grand jury investigation by the United States Department of Justice Antitrust Division, according to the complaint.
The lawsuit was filed under seal in the U.S. District Court for the District of Connecticut. Portions of the complaint are redacted in order to avoid compromising the ongoing investigation, according to Wilson’s release.
South Carolina has joined Alabama, Arizona, California, Colorado, Connecticut, Delaware, Florida, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Montana, Nebraska, Nevada, New Hampshire, New Jersey, New York, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, Tennessee, Utah, Vermont, Virginia, Washington and Wisconsin in the complaint.