Multistate Generic Lawsuit Expands and Includes Executives

A multistate antitrust investigation on generic drug pricing has expanded further. It now includes suits against executives at generic makers.

In late October, Connecticut Attorney General George Jepsen and 45 other state attorneys general (AGs) asked United States District Court Eastern District Of Pennsylvania for permission to file a new complaint in the states' pending lawsuit that increases the number of generic drug manufacturer defendants from 6 to 18 and the number of drugs at issue from 2 to 15.

For the first time, the states are also suing senior executives at two generic drug companies whom the state attorneys allege engaged in the illegal conduct: Rajiv Malik, President and Executive Director of Mylan N.V., the parent company of Mylan Pharmaceuticals, Inc.; and Satish Mehta, the CEO and managing director of Emcure Pharmaceuticals, the parent company of Heritage Pharmaceuticals, Inc.

In the expanded complaint, the states allege a number of specific illegal agreements among the defendants to fix prices and allocate customers for a number of generic drugs. The AGs claim that the conspiracies were part of a much broader, overarching industry code of conduct “that enabled the defendant manufacturers to divvy up the market for specific generic drugs in accordance with an established, agreed-upon understanding for assigning each competitor their share of the market,” Jepson’s office said in a statement.

"The generic drug market was conceived as a way to help bring down the cost of prescription medications for American consumers," according to the statement. "For years, though, those saving have not been realized; and, instead, the prices of many generic drugs have skyrocketed.”

In the new complaint, the AGs allege “that the defendant companies' collusion was so pervasive that it essentially eliminated competition from the market for these 15 drugs in its entirety,” Jepsen said. "Our ongoing investigation continues to uncover additional evidence, and we anticipate bringing more claims involving additional companies and drugs at the appropriate time.”

While the 15 drugs included in the new complaint are not blockbusters, Charley Grant, writing in the The Wall Street Journal, warned that the AGs are not likely to limit the complaint to just those 15 products. “…Jepsen said in an interview that the publicly available allegations are the ‘tip of the iceberg’ and predicted that his investigation will further expand into new drugs,” Grant wrote.

However, two of the defendants, Mylan and Lannett, said their own investigations found no wrongdoing, according to The Wall Street Journal.

The Association for Accessible Medicines (AAM), which represents generic and biosmilar manufacturers, also defended generic drugmakers’ practices. “AAM is fully committed to compliance with all laws and ethical business practices,” said Jeff Francer, Senior Vice President and General Counsel for the organization. “AAM and our member companies are committed to supporting policies that promote competition and help speed the availability of generic and biosimilar medicines to patients.”

The lawsuit was first filed against generic drug manufacturers Heritage Pharmaceuticals, Inc.; Aurobindo Pharma USA; Citron Pharma, LLC; Mayne Pharma (USA); Mylan Pharmaceuticals; and Teva Pharmaceuticals USA. The suit alleges that the manufacturers entered into illegal conspiracies in order to unreasonably restrain trade, artificially inflate and manipulate prices and reduce competition in the United States for two drugs: doxycycline hyclate delayed release, an antibiotic, and glyburide, an oral diabetes medication.

The states are seeking to expand the complaint to include acetazolamide for glaucoma and epilepsy; the antibiotic doxycycline monohydrate; fosinopril-hydrochlorothiazide for high blood pressure; glipizide-metformin and glyburide-metformin for diabetes; leflunomide, used to treat rheumatoid arthritis; meprobamate, an anxiety medication; nystatin, an antifungal medication; and several other drugs.