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US states accuse drugmakers of scheme to inflate drug prices: Lawsuit

Activists rally during a protest against the price of EpiPens, a medical device for the treatment of anaphylaxis, in New York City on August 30, 2018. (Getty Images)

US states have filed a lawsuit accusing drug companies of orchestrating a sweeping scheme to inflate drug prices, sometimes by more than 1,000 percent, and stifle competition for generic drugs.

The 20 drug companies engaged in illegal conspiracies to divide up the market for drugs to avoid competing and, in some cases, conspired to either prevent prices from dropping or to raise them, state prosecutors said on Saturday.

The 500-page lawsuit accuses the generic drug industry of a long history of discreet agreements to ensure that companies that are supposedly competitors each get a “fair share,” according to the complaint by 44 US states.

Generic drugs can save drug buyers and taxpayers tens of billions of dollars a year because they are a lower-priced alternative to brand-name drugs.

The situation worsened in 2012, said the lawsut, which was filed on Friday in the US District Court in Connecticut.

“Apparently unsatisfied with the status quo of ‘fair share’ and the mere avoidance of price erosion, Teva and its co-conspirators embarked on one of the most egregious and damaging price-fixing conspiracies in the history of the United States,” the complaint said.

In some instances, the coordinated price increases were more than 1,000 percent, the lawsuit said.

“Prices for hundreds of generic drugs have risen – while some have skyrocketed, without explanation, sparking outrage from politicians, payers and consumers across the country whose costs have doubled, tripled, or even increased 1,000% or more,” it said.

A representative of Teva USA, a unit of Israeli company Teva Pharmaceutical Industries Ltd, said it will fight the lawsuit.

With Teva at the center of the conspiracy, the drug companies colluded to significantly raise prices on 86 medicines between July 2013 and January 2015, the complaint said.

The drugs included everything from tablets and capsules to creams and ointments to treat conditions including high cholesterol, high blood pressure, cancer, diabetes, epilepsy and more, they said.

The lawsuit also names 15 individuals as defendants who it said carried out the schemes on a day-to-day basis.

“The level of corporate greed alleged in this multi-state lawsuit is heartless and unconscionable,” Nevada Governor Steve Sisolak said in a statement.

As a result of the drug companies’ conspiracies, the complaint said, consumers and states paid “substantially inflated and anti-competitive prices for numerous generic pharmaceutical drugs” while the drug companies profited.

Soaring drug prices from both branded and generic manufacturers have sparked outrage and investigations in the United States.

The criticism has come from across the political spectrum, from President Donald Trump, a Republican, to progressive Democrats including US Senator Elizabeth Warren, who is running for president.


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