Minnesota Attorney General Sues Six Drug Cos. For Price-Fixing Scheme
Minnesota Attorney General Lori Swanson joined 19 other states on Thursday in filing an antitrust lawsuit against six major prescription drug manufacturers for colluding to fix prices of generic prescription drugs.
Among the accused are Heritage Pharmaceuticals Inc., Mayne Pharma Inc., Citron Pharma LLC, Aurobindo Pharma USA Inc., Teva Pharmaceuticals USA Inc. and Mylan Pharmaceuticals Inc. for allegedly manipulating the prices of widely used diabetes and antibiotic medicines.
A series of emails, text messages and meetings noted in the lawsuit allegedly show the drug companies engaging in a price-fixing scheme. Moreover, one of the “significant players” of the collusion is said to be a Minnesota-based salesperson for Heritage, the lawsuit stated.
“She organized dinners and meetings among employees of competitors when they visited the state,” according to a press release from the Minnesota Attorney General’s office. “The dinners and meetings led to the exchange of information about the competitors’ business plans and ultimately led to agreements on setting prices and/or allocating the market so as to avoid competing on price.”
The lawsuit alleged that the illegal activities began in 2013.
Shortly thereafter, a rise in generic drug prices was being reported. An analysis by a pharmacy benefits manager that was conducted in 2014 found that consumers and insurers were paying 373 percent more for the 50 most popular generic prescription drug medications than they did in 2010.
Another 2014 report by the National Community Pharmacists Association found that “prices for many essential generic drugs had risen by as much as 600 percent, 1,000 percent or more.”
“Skyrocketing prescription drug prices are a big problem for patients,” said Minnesota Attorney General Lori Swanson in a statement. “While generic competition is supposed to bring prices down, these companies secretly agreed to rig the system to drive prices up at the expense of patients.”
In America, generic medicines make up 89 percent of all prescriptions dispensed, but only 27 percent of total drug costs. Approximately $74.5 billion of generic prescriptions drugs were sold in the U.S. last year.
Patients, insurers and hospitals often turn to generic prescription drugs as a more inexpensive—but oftentimes just as effective—route over brand-name drugs. In Minnesota alone, the annual savings for generic prescription drugs versus alternative options totaled $3.3 billion last year.
The lawsuit filed in federal court today will seek injunctive relief and disgorgement of any profits from the six drug companies’ illegal actions.