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Generic Drugmakers Conspired To Inflate Prices By 1000 Percent


Prosecutors claim that Teva, Pfizer, Novartis, and Mylan, among others, schemed their way to higher profits. 

A lawsuit filed by 44 U.S. states last week claims that drug companies — including Teva, Pfizer, Novartis and Mylan — conspired to inflate the prices of generic drugs by as much as 1,000 percent.

As a result of the alleged scheme, prices impacted over 100 generic drugs, including the HIV treatment drug lamivudine-zidovudine (Combivir). 

As The New York Times reports, state prosecutors outline in the filing a price-fixing scheme involving over a dozen generic drug companies. Furthermore, they cite the executives of these companies were well aware that these efforts were illegal, which explains why there were no written records (via email or text). Instead, the executives allegedly chose to keep their correspondence in-person at “meals, parties, golf outings, and other networking events,” The Times states. 

The scheme was at its most toxic between July 2013 and January 2015, when Teva, the world's largest manufacturer of generic drugs, raised prices on nearly 400 formulations of 112 generic drugs, according to the complaint. It’s believed that competitors cooperated with each other on how to price their significant drugs so that each company can maintain a “fair share” of the generic drug market.

Meanwhile, executives were also figuring out how they can raise drug prices simultaneously. 

The corruption of pharmaceutical industries and their unfair pricing inflation isn’t new. In February 2018, the public learned that Teva was charging $18,375 for a bottle of 100 pills for a rare medical condition known as Wilson disease. In August 2019, Mylan also came under fire for raising the price of a two-injection EpiPen from $100 to $600.

According to the complaint, Teva was one of the leaders in the conspiracy and its involvement is described as “pervasive and industrywide.” 

The Israeli-based Teva was in the news this month following the announcement that Gilead would release its patent on Truvada a year earlier than anticipated to the company. The move would allow Truva to release a generic version of Truvada on September 30, 2020. However, the deal prevents other companies like Amneal, Aurobindo and Mylan from producing a generic form of Truvada until 2021. 

“Rather than enter a particular generic drug market by competing on price in order to gain market share,” the complaint explained, “competitors in the generic drug industry would systematically and routinely communicate with one another directly, divvy up customers to create an artificial equilibrium in the market, and then maintain anticompetitively high prices.”

Among some of the drugs that were part of the inflation scale, according to The Times, were budesonide, an asthma medication; fenofibrate, which treats high cholesterol; amphetamine-dextroamphetamine for A.D.H.D.; oral antibiotics; blood thinners; cancer drugs; contraceptives; and antidepressants.

“We all know that prescription drugs can be expensive,” Gurbir S. Grewal, the New Jersey attorney general, said in a statement. “Now we know that high drug prices have been driven in part by an illegal conspiracy among generic drug companies to inflate their prices.”

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David Artavia