June 10, 2020
States allege broad, industry-wide conspiracy to restrain competition and raise prices on at least 83 generic topical dermatological drugs
Carson City, NV - Today, Nevada Attorney General Aaron D. Ford and 51 other attorneys general filed a complaint against 26 corporate defendants and 10 individual defendants in a third lawsuit stemming from their ongoing antitrust investigation into a widespread conspiracy in the generic drug industry. The complaint alleges longstanding agreements among manufacturers so that each competitor gets a "fair share" of the market, and to prevent "price erosion" of the drugs due to competition.
This new complaint, filed in the U.S. District Court for the District of Connecticut, focuses on 83 topical generic drugs that include creams, gels, lotions, ointments, shampoos and solutions used to treat a variety of skin conditions, pain and allergies. These drugs account for billions of dollars of sales in the United States.
Among the defendants are Taro Pharmaceuticals USA, Perrigo New York, Inc. and Fougera Pharmaceuticals USA (which is now defendant Sandoz, Inc.). Between 2007 and 2014, Taro, Perrigo, and Fougera sold nearly two-thirds of all generic topical products dispensed in the United States. The lawsuit seeks damages, civil penalties and actions by the court to restore competition to the generic drug market.
"Generic drugs play a critical role in our health care industry, and many Nevadans, especially our seniors, struggle with the skyrocketing cost of prescriptions," said AG Ford. "Lower and more affordable drug prices require genuine competition in the marketplace, and my office is holding companies trying to disrupt this competition accountable. Through a unified and targeted action, my Bureau of Consumer Protection is pursuing these companies for the consequences their actions have had on all Americans and our health care system."
The complaint is based on direct evidence of unlawful agreements to minimize competition and raise prices on dozens of topical products. The States have evidence from several cooperating witnesses at the core of the conspiracy, a massive document 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 generic drug industry. Among the records obtained by the States is a two-volume notebook containing the contemporaneous notes of one of the cooperating witnesses that memorialized his discussions during phone calls with competitors and internal company meetings over a period of several years.
This new complaint is the third to be filed in an ongoing, expanding investigation that the Connecticut Office of the Attorney General has referred to as possibly the largest domestic corporate cartel case in the history of the United States. The first complaint, still pending in the U.S. District Court in the Eastern District of Pennsylvania, was filed in 2016 and now includes 18 corporate Defendants, two individual Defendants, and 15 generic drugs. Two former executives from Heritage Pharmaceuticals, Jeffery Glazer and Jason Malek, have entered into settlement agreements and are cooperating with the Attorneys General working group in that case. The second complaint, also pending in the U.S. District Court in the Eastern District of Pennsylvania, was filed in 2019 against Teva Pharmaceuticals and 19 of the nation's largest generic drug manufacturers. The complaint names 16 individual senior executive Defendants. The States are currently preparing for trial on that Complaint.
In addition to Nevada, attorneys general from the following states are participating in complaint: Alabama, Alaska, Arizona, Arkansas, Colorado, Connecticut, Delaware, District of Columbia, Florida, Georgia, Territory of Guam, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, New Hampshire, New Jersey, New Mexico, New York, North Carolina, North Dakota, Northern Mariana Islands, Ohio, Oklahoma, Oregon, Pennsylvania, Puerto Rico, Rhode Island, South Carolina, Tennessee, Utah, U.S. Virgin Islands, Vermont, Virginia, Washington, West Virginia and Wisconsin in filing the complaint.
The defendant list is attached.