Drugmakers hiked prices 1,000% in massive price-fixing scheme, states allege

Twenty leading drug companies—including Teva Pharmaceuticals, Pfizer, Novartis, and Mylan—were in cahoots for years to fix and dramatically inflate the prices of more than 100 generic drugs, in some cases to raising prices "well over 1,000 percent," according to a lawsuit filed late last week by 44 states. The alleged scheme was intended to ensure that each company was a "responsible competitor" who was "playing nice in the sandbox" to get its "fair share" of profits from the drugs. Those drugs included pills, capsules, ointments, and cream. They range from oral antibiotics, blood thinners, cancer drugs, contraceptives, statins, anti-inflammatory drugs, anti-depressants, blood pressure medications, drugs used to treat HIV, and drugs for ADHD. A full list of the generic drugs can be found here. "We all know that prescription drugs can be expensive," said New Jersey Attorney General Gurbir S. Grewal in a statement. "Now we know that high drug prices have been driven in part by an illegal conspiracy among generic drug companies to inflate their prices." The lawsuit stems from a years-long, multi-state investigation spearheaded by Connecticut Attorney General William Tong. "We have hard evidence that shows the generic drug industry perpetrated a multi-billion dollar fraud on the American people," Tong said in a statement. That hard evidence included "emails, text messages, telephone records, and former company insiders." And the investigation is still ongoing, Tong added. "We will not stop until these companies and the individuals who orchestrated these schemes are held accountable."

Rubbing elbows

According to the lawsuit, the alleged shady dealings peaked between July 2013 and January 2015. The companies would routinely get in touch with one another, divide up customers, and set and maintain high prices. Details were usually hashed out in face-to-face encounters during many swanky events such as trade shows, cocktail parties, dinners, conferences, and golf outings. In instances when there was written evidence of the deals, conspirators made plain attempts to destroy it, the states allege. The lawsuit also paints Teva as playing a central role. In the peak timeframe noted in the lawsuit, Teva raised its prices on about 387 formulations of 112 generic drugs. In a press statement, Teva responded saying: "The allegations in this new complaint, and in the litigation more generally, are just that—allegations. Teva continues to review the issue internally and has not 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 lawsuit is the second stemming from the multi-state investigation alleging that the 20 companies and 15 individual drug company executives violated federal and state antitrust laws. The states are seeking damages, civil penalties, and actions from the courts to help overhaul the generic drug market.