US states seek to widen generic drug price-fixing lawsuit, including claims against Mylan executive

A number of US states on Tuesday asked federal court for permission to file a new complaint as part of a pending lawsuit that would increase the number of companies from six to 18 in the case and boost the number of generic drugs at issue from two to 15. In addition, as part of the antitrust investigation of the generic drug industry, the states are suing senior executives at two drugmakers, including Mylan's president Rajiv Malik, who are alleged to have engaged in the illegal conduct.

In the expanded complaint, the states allege a number of specific deals among the defendants to fix prices and allocate customers for a number of generic drugs. The states further claim that these conspiracies were part of a "much broader, overarching industry code of conduct" that enabled the companies to divide the market for specific generic medicines in accordance with an "established, agreed-upon understanding for assigning each competitor their share of the market." 

The states contend that the drugmakers frequently coordinated their schemes via direct interactions with their competitors at industry trade shows, customer conferences and other events, in addition to direct communication by email, phone and text messages. The states argue that the actions resulted in artificially increased prices for generic drugs reimbursed by federal and state healthcare programmes including Medicaid, and higher coverage costs for employer-sponsored health plans and greater out-of-pocket spending for patients. 

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The companies included in the expanded complaint are Teva's Actavis unit, Ascend Laboratories, Apotex, Dr. Reddy's, Emcure Pharmaceuticals, Glenmark Pharmaceuticals, Lannett, Par Pharmaceuticals, Novartis' Sandoz unit, Sun Pharmaceuticals and Cadila Healthcare's Zydus Pharmaceuticals subsidiary. Meanwhile, the drugs listed in the expanded probe include the antibiotic doxycycline, combination diabetes treatment glipizide-metformin and verapamil for hypertension. 

Connecticut Attorney General George Jepsen stated "we allege in this complaint that the defendant companies' collusion was so pervasive that it essentially eliminated competition from the market for these 15 drugs in its entirety," adding "our ongoing investigation continues to uncover additional evidence, and we anticipate bringing more claims involving additional companies and drugs at the appropriate time." 

In response to the allegations, Mylan said "we have been investigating these allegations thoroughly and have found no evidence of price fixing." The company added it "has deep faith in the integrity of…Malik, and stands behind him fully," noting that it will "defend this case vigorously." Shares of Mylan dropped as much as 6.1 percent on the news. 

Meanwhile, the other executive name as a defendant in the new complaint is Emcure's CEO Satish Mehta.

 

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