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A shocking lawsuit filed by the Attorney Generals from 44 states claims that the largest drug manufacturers in America conspired to artificially inflate the prices of more than 100 various generic medications by as much as 1,000 percent.
The suit was filed on Friday at the federal court in Connecticut and it implicated 20 pharmaceutical firms, among them Teva, Novartis, Pfizer, and Mylan including 15 individuals, the senior executives in charge of sales, marketing, and pricing.
Speaking to the Associated Press, Connecticut Attorney General William Tong said, “We have hard evidence that shows the generic drug industry perpetrated a multibillion-dollar fraud on the American people.”
“We have emails, text messages, telephone records, and former company insiders that we believe will prove a multi-year conspiracy to fix prices and divide market share for huge numbers of generic drugs.”
Tong added that their investigation discovered the primary reason why health care costs (particularly generic prescription drugs) are so expensive in the US.
The rapid rise in prices of prescription drugs even caught the attention of politicians from both ends of the political spectrum, from President Trump himself to liberal Democratic presidential candidate Sen. Elizabeth Warren of Massachusetts.
According to the investigators, drugs for conditions such as cancer, diabetes, arthritis, asthma, and HIV translate to billions of dollars of sales in the US.
In a statement, New Jersey Attorney General Gurbir S. Grewal said, “We all know that prescription drugs can be expensive. Now we know that high drug prices have been driven in part by an illegal conspiracy among generic drug companies to inflate their prices.”
Forty-four states plus Puerto Rico filed the suit with Connecticut leading the probe.
The suit contends that drug companies have been operating for years under a non-compete agreement and to settle for their so-called “fair share” of the market so as not to push prices down with competition.
It adds that in 2012, companies decided to “take this understanding to the next level” by engaging in “one of the most egregious and damaging price-fixing conspiracies in the history of the United States.”
Not only did companies strive to keep their “fair share” of the market on generic drugs but also “significantly raise prices on as many drugs as possible.”
The leading firm at the head of the conspiracy was named as Teva Pharmaceuticals USA Inc., which is a wholly-owned subsidiary of Teva Pharmaceuticals Industries, Ltd. in Israel.
According to the suit, Teva chose a core group of competitors that it already had “very profitable collusive relationships” and came up with an understanding to match each other’s price increases.
The collusion resulted in “many billions of dollars of harm to the national economy over a period of several years.” While the number of price increases varied, it reached over 1,000 percent for some of the drugs.
The suit adds that the defendants knew the unlawful nature of their activity and conducted communications in person or via cellphone “in an attempt to avoid creating a written record of their illegal conduct.”
The suit states: “When communications were reduced to writing or text messages, defendants often took overt and calculated steps to destroy evidence of those communications.”
Teva denied any wrongdoing. Kelley Dougherty, a vice president at Teva, said in a statement: “The allegations in this new complaint, and in the litigation more generally, are just that – allegations.
“The company delivers high-quality medicines to patients around the world and is committed to complying with all applicable laws and regulations in doing so.”
Last year, Teva had already come under fire for charging $18,375 per 100-pill bottle of a drug used in the treatment of Wilson disease, a rare medical condition.
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