Troubling allegations revealed Wednesday in a federal case flout “decency,” as one official put it, and may make consumers around the country wonder if they are paying too much for generic drugs that are supposed to provide low-cost versions of medicines including antibiotics and diabetes treatment.
A two-year investigation has resulted in the first criminal charges from the Justice Department, which accused two executives of colluding to fix prices.
Jeffrey Glazer a former chief executive officer at Heritage Pharmaceuticals Inc., and ex-president Jason Malek were charged in Philadelphia with conspiring to fix prices for an antibiotic, doxycycline hyclate, and a diabetes drug, glyburide.
“Millions of Americans rely on prescription medications to treat acute and chronic health conditions,” Deputy Assistant Attorney General Brent Snyder of the Justice Department’s Antitrust Division said in a statement. “By entering into unlawful agreements to fix prices and allocate customers, these two executives sought to enrich themselves at the expense of sick and vulnerable individuals who rely upon access to generic pharmaceuticals as a more affordable alternative to brand-name medicines.”
Attempts to reach defendants for comment through attorneys were not immediately successful.
In a statement, Heritage said, “In August 2016, following an internal investigation that revealed a variety of serious misconduct by the individuals charged today, Heritage Pharmaceuticals terminated them. We are fully cooperating with all aspects of the Department of Justice’s continuing investigation. Recently Heritage initiated its own legal action against these same individuals to seek redress for an elaborate embezzlement and self-dealing scheme. We are deeply disappointed by the misconduct and are committed to ensuring it does not happen again.”
Anyone with information on price fixing or other anti-competitive conduct related to the generic drug industry can contact the Antitrust Division’s Citizen Complaint Center at 1-888-647-3258, officials said.
“Conspiring to fix prices on widely-used generic medications skews the market, flouts common decency – and very clearly breaks the law,” said Special Agent in Charge Michael Harpster of the FBI’s Philadelphia Division. “It’s a sad state of affairs when these pharmaceutical executives are determined to further pad their profits on the backs of people whose health depends on the company’s drugs.”