Massachusetts, other states sue generic drug companies for conspiracy to raise prices

BOSTON – Alleging a widespread conspiracy to inflate and manipulate the prices of dozens of generic drugs, Attorney General Maura Healey announced today that she has joined a coalition of states in filing a lawsuit against 20 drug makers and 15 pharmaceutical executives.

“Our case alleges that some of the largest generic drug manufacturers in the country actively conspired together to fix prices and profit as a result of their illegal scheme,” said AG Healey. “People depend on generic drugs to keep health care costs down and make medications more affordable. The actions by these companies are reprehensible, illegal, and betray the public’s trust.”

The complaint, filed on Friday in the U.S. District Court of Connecticut, alleges that 20 major drug makers, including Teva, Sandoz, and Mylan, actively worked together to coordinate and fix prices of more than 100 different medications that treat a wide array of conditions – including diabetes, cancer, multiple sclerosis, HIV/AIDS, and epilepsy – and account for billions of dollars of sales in the United States. In some instances, the complaint alleges that these companies were able to drive prices up for certain drugs by more than 1,000 percent.

The complaint further alleges that the senior executives, who were responsible for sales, marketing, pricing and operations, regularly conspired to allocate markets and raise prices through social and industry events, as well as through emails, telephone calls, and text messages. The executives used terms like “fair share,” “playing nice in the sandbox,” and “responsible competitor” to describe how they unlawfully discouraged competition, raised prices and engaged in a coordinated and systematic campaign to conspire with each other.

AG Healey previously joined a similar lawsuit in 2016 against six different pharmaceutical companies. That complaint is pending in the U.S. District Court in the Eastern District of Pennsylvania.

The Corporate Defendants in today’s announcement are:

Teva Pharmaceuticals USA, Inc.
Sandoz, Inc.
Mylan Pharmaceuticals Inc.
Actavis Holdco US, Inc.
Actavis Pharma, Inc.
Amneal Pharmaceuticals, Inc.
Apotex Corp.
Aurobindo Pharma U.S.A., Inc.
Breckenridge Pharmaceutical, Inc.
Dr. Reddy’s Laboratories, Inc.
Glenmark Pharmaceuticals Inc. USA
Greenstone LLC
Lannett Company, Inc.
Lupin Pharmaceuticals, Inc.
Par Pharmaceutical Companies, Inc.
Pfizer, Inc.
Taro Pharmaceuticals USA, Inc.
Upsher-Smith Laboratories, LLC
Wockhardt USA, LLC
Zydus Pharmaceuticals (USA), Inc.

The individual Defendants who have been named include:

Ara Aprahamian, Vice President of Sales and Marketing at Taro

David Berthold, Vice President of Sales at Lupin

James Brown, Vice President of Sales at Glenmark

Maureen Cavanaugh, former Senior Vice President and Chief Commercial Officer, North America, for Teva

Marc Falkin, former Vice President, Marketing, Pricing and Contracts at Actavis

James Grauso, former Senior Vice President, Commercial Operations for Aurobindo from December 2011 through January 2014. Since February 2014, Grauso has been employed as the Executive Vice President, N.A. Commercial Operations at Glenmark

Kevin Green, former Director of National Accounts at Teva from January 2006 through October 2013. Since November 2013, Green has worked at Zydus as the Vice President of Sales

Armando Kellum, former Vice President, Contracting and Business Analytics at Sandoz

Jill Nailor, Senior Director of Sales and National Accounts at Greenstone

James Nesta, Vice President of Sales at Mylan

Kon Ostaficiuk, the President of Camber Pharmaceuticals, Inc.
Nisha Patel, former Director of Strategic Customer Marketing and later, Director of National Accounts at Teva

David Rekenthaler, former Vice President, Sales US Generics at Teva

Richard Rogerson, former Executive Director of Pricing and Business Analytics at Actavis

Tracy Sullivan DiValerio, Director of National Accounts at Lannett

The lawsuit seeks damages, civil penalties and actions by the court to restore competition to the generic drug market.

In addition to Massachusetts, and led by Connecticut’s Attorney General, the plaintiff jurisdictions in this lawsuit are Alabama, Alaska, Arizona, Colorado, Delaware, Florida, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New Mexico, New Jersey, New York, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, Puerto Rico, Rhode Island, South Carolina, Tennessee, Utah, Vermont, Virginia, Washington, West Virginia, and Wisconsin..

This matter is being handled in Massachusetts by Assistant Attorney General and Division Chief Will Matlack, Assistant Attorney General and Deputy Division Chief Michael MacKenzie, Assistant Attorney General Daniel Leff, and Economic Analyst Grace Bradshaw, all of the AG Healey’s Antitrust Division.