As many as 20 states in the US have filed a lawsuit against 6 generic drug manufacturers, saying they have conspired to price a couple of common generic medicines. The businesses that are facing the brunt include Mylan Inc (NASDAQ:MYL) of Pennsylvania, Teva Pharmaceuticals, Citron Pharma, Heritage, and Aurobindo Pharma (NSE:AUROPHARMA) of India.
According to the allegation, these drug makers had increased the price of the generic versions of the diabetes medicine glyburide and antibiotic doxycycline hyclate together. Mylan has already denied the charge saying, “To date, we know of no evidence that Mylan participated in price fixing”.
Heritage Pharmaceuticals is the “Ring Leader”
In the lawsuit that has been filed in the U.S. District Court for the District of Connecticut on Thursday, Heritage Pharmaceuticals has been named as the “ring leader”, which is sure to be damaging for the business.
The lawsuit further states that the top executives of these businesses along with the sales executives hiked the prices by setting it higher or allocating markets. The states added that these executives knew what was happening and that it was illegal, and yet took no action to prevent this. In fact, they even deleted emails and avoided written communications, proving they played an active part in this.
Reacting to this news, Heritage said former executives working with the company were responsible for this, and they have already been removed. So in effect, the drug maker is accepting the claims of these 20 American states. Denise Bradley, the spokeswoman of Teva said they have just received the information and will react after reviewing it.
Eric Schneiderman, the New York Attorney General said, “Companies that collude and fix prices for generic drugs in order to pad their profits must be held accountable for the very real harm they inflict on New Yorkers’ ability to pay for life-saving medications”.
The Investigation Is Ongoing
Attorneys of the states are not over yet with their investigations to find more instances of fixing generic drug prices, it was revealed. So there is a chance that more well-coordinated and broad schemes might soon be revealed, exposing other drug makers.
The states also say in their lawsuit that executives knew that the conduct was illegal and either deleted emails or made efforts to avoid communicating in writing.
The states that filed the complaint include Louisiana, Maine, Minnesota, Nevada, Kentucky, Maryland, Iowa, Kansas, Ohio, Pennsylvania, Idaho, Massachusetts, Delaware, Florida, Virginia, North Dakota, Hawaii, Washington, and New York. They were led by Connecticut.