By Forum Staff
Fifty attorneys general on Friday announced settlements with Heritage Pharmaceuticals and Apotex Inc. totaling $49.1 million for their roles in a massive, long-running scheme to artificially inflate and manipulate prices, reduce competition, and restrict trade for dozens of generic prescription drugs. The companies in the scheme, some of which increased prices by 1,000 percent, manufactured essential medications to treat diseases ranging from diabetes to cancer to ADHD. As part of the settlements, both companies have agreed to cooperate in ongoing multistate investigations against 30 corporate defendants and 25 individual executives. Both companies have also agreed to implement internal reforms to ensure fair competition and compliance with antitrust laws.
The settlements are the result of two lawsuits filed by the Office of State Attorney General Tish James and a coalition of attorneys general against some of the nation’s largest pharmaceutical companies. The first complaint, filed in 2016, included Heritage and 17 other corporate defendants, two individual defendants, and 15 generic drugs. Two former executives from Heritage Pharmaceuticals, Jeffrey Glazer and Jason Malek, have since entered into settlement agreements and are cooperating with the states’ investigations. The second complaint was filed in 2019 against Teva Pharmaceuticals and 19 of the nation’s largest generic drug manufacturers. The complaint names 16 individual senior executives as defendants. The third complaint was filed in 2020 against Sandoz and 18 other of the nation’s largest generic drug manufacturers, in addition to 10 individual defendants.
The lawsuits allege these companies engaged in a broad, coordinated, and systematic conspiracy to fix prices, avoid competition, and rig bids for more than 100 different generic drugs. The companies maintained an interconnected web of industry executives where these competitors met with each other during industry dinners, “girls’ nights out,” lunches, cocktail parties, and golf outings, and communicated via frequent telephone calls, emails, and text messages that sowed the seeds for their illegal agreements. Defendants used terms like “fair share,” “playing nice in the sandbox,” and “responsible competitor” to describe how they unlawfully discouraged competition, raised prices, and enforced an ingrained culture of collusion.
The drugs included in the scheme span all types, including tablets, capsules, creams, and ointments; and classes, including antibiotics, anti-depressants, contraceptives, and non-steroidal anti-inflammatory drugs. They treat a range of diseases and conditions from basic infections to diabetes, cancer, epilepsy, multiple sclerosis, HIV, ADHD, and more. In some instances, the coordinated price increases were over 1,000 percent. Digoxin, an essential heart medication manufactured by Heritage, tripled in price, causing patients to pay hundreds of dollars more for the drug.
The cases stem from an investigation built on evidence from several cooperating witnesses at the core of the conspiracy, a massive database of over 20 million documents, and a phone records database containing millions of call detail records and contact information for over 600 sales and pricing individuals in the generics industry.
A motion for preliminary approval of the $10 million settlement with Heritage was filed Thursday in the United States District Court for the District of Connecticut in Hartford. A settlement with Apotex for $39.1 million is contingent upon obtaining signatures from all necessary states and territories and will be finalized and filed in the U.S. District Court.
Consumers who purchased a generic prescription drug manufactured by either Heritage or Apotex between 2010 and 2018 may be eligible for compensation. To determine eligibility, call (866) 290-0182, email info@AGGenericDrugs.com or visit AGGenericDrugs.com.