In a recent lawsuit filed by the Attorney Generals of 20 different states against six major pharmaceutical companies, the states allege that the companies have been secretly conspiring to inflate prices on certain generic drugs. Connecticut, already having suspicion, began it’s own investigation in 2014. Over the next couple of years, what they have discovered has been more than they originally bargained for.
Where the blame lies
The lawsuit allegedly states that senior and marketing executives had direct contact with competitors during conferences, trade shows and different events. The suit states that they also made contact through emails, text messages and phone calls to artificially maintain and inflate the prices of two generic drugs: the antibiotic Doxycycline Hyclate Delayed Release and the diabetic drug Glyburide. The investigation is still underway to determine if this is true.
Companies that are involved
Teva, the world’s largest manufacturer of generic medications, is on the list for the lawsuit. Mylan, the manufacturer of the EpiPen, is also on the list. Mylan has had it’s share of trouble earlier this year by raising levels of this life-saving device to outrageous prices. The public was furious with this, to say the least, as the price skyrocketed this summer $250 more than the original price.
Aurobindo Pharma USA, Inc, Citron Pharma, LLC, and Mayne Pharma are three other companies under investigation. At the top of the list is Heritage Pharmaceuticals, a New Jersey-based generic manufacturer. They are thought to be the “ring leaders” of the entire process. Heritage states that the two former Heritage executives that were charged with fixing prices were terminated in August, and they are fully cooperating with the investigation.
States that are involved
As stated, there are 20 states now under investigation for the alleged conspiracy and price fixing. The suit began and was filed in Connecticut, and the states that are included are as follows:
- Kansas
- Delaware
- New York
- Virginia
- Pennsylvania
- Nevada
- Florida
- Washington
- Louisianna
- Hawaii
- Kentucky
- Maine
- Idaho
- Ohio
- Iowa
- Maryland
- Massachusetts
- Minnesota
- North Dakota
- The defenses argument
The defense says that these allegations are not true and argue that the price increases were due to more natural factors. They claim that factors like industry coordination, elimination of unprofitable generic drugs or mandated plant closures by the Federal Drug Administration are the cause of this. Congress and the Department of Justice are investigating these claims.
Overall
Whatever the reason for the skyrocketing price increases on these generic drugs, the immediate outcome remains the same. Those in the public who depend on these medications are forced to pay substantially higher prices to receive medication that they need for proper health.
Officials haven’t made a decision, but they are conducting a complete and thorough investigation into these matters to see what or who is actually behind the price increases. Whether it is, in fact, natural forces causing them or the pharmaceutical companies putting more in their pocket, the Justice Department will make every effort to provide a fair and just decision on the matter.
Learn more about Class Action Lawsuits.
