Generic drug makers accused of widespread price-fixing conspiracy

Florida, New York and 18 other states filed a lawsuit alleging a widespread conspiracy and accusing half a dozen generic drug makers of inflating and manipulating prices in a $75 billion industry, officials said Thursday.

“Generic medicine is an important option for consumers in need of medical care and any effort to distort the price of these drugs harms consumers,” Florida Attorney General Pam Bondi said in a statement. “Today’s multistate action seeks to hold these drug companies accountable and protect the market place.”

New York Attorney General Eric Schneiderman said “companies that collude and fix prices for generic drugs in order to pad their profits must be held accountable for the very real harm they inflict.” Such practices make it harder for consumers to pay for “life-saving medications,” he said.

prescription drugsThe suit names Heritage Pharmaceuticals Inc., Aurobindo Pharma USA Inc., Citron Pharma LLC, Mayne Pharma (USA) Inc., Mylan Pharmaceuticals Inc. and Teva Pharmaceuticals USA.

“We have not found evidence that would give rise to any civil or criminal liability,” said Teva spokeswoman Denise Bradley.

“To date,  we know of no evidence that Mylan participated in price fixing,” said Mylan spokeswoman Nina Devlin.

Attempts to seek comment from other firms were not immediately successful.

Officials said the states’ lawsuit accuses the companies of entering into numerous illegal conspiracies in order to unreasonably restrain trade, artificially inflate and manipulate prices and reduce competition in the United States. Drugs involved include doxycycline hyclate delayed release, an antibiotic used to treat conditions including respiratory tract infections, and glyburide, an oral diabetes medication

The states’ complaint alleges that the defendants routinely coordinated the schemes through direct interaction with competitors at industry trade shows, customer conferences and other events — even “girls nights out”  — as well as through direct email, phone and text message.

One day, for instance, 13 CEOs and other executives from generic drug makers met at a steakhouse in Bridgewater, N.J., the complaint said. Jokes from that dinner are blacked out in a public version of the complaint.

Meanwhile, the prices for a large number of generic drugs had begun skyrocketing by 2014, the complaint said. Prices for some generics spiked as much as 600 percent to 2,000 percent, a pharmacist group reported. More than $500 million of Medicaid drug reimbursement during the twelve months ending on June 30, 2014 was for generic drugs whose prices had increased by more than 100 percent, the complaint said.

A day earlier, federal officials said they charged Jeffrey Glazer a former chief executive officer at Heritage Pharmaceuticals Inc., and ex-president Jason Malek in Philadelphia with conspiring to fix prices for those drugs.

Attorneys for those defendants declined comment or did not respond.

In a statement Wednesday, 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.”





Why drugs cost so much: Price fixing charges rock generic world

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.

rx-drugsJeffrey 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.”

Abilify drug marketing charges settled with Florida, 42 states

Florida and 42 other states announced Thursday a $19.5 million settlement with Bristol-Myers Squibb Co. related to the alleged improper marketing of the drug Abilify to certain elderly patients and children.

“With this multistate settlement, consumers will be armed with better information about medication that could endanger their health,” Florida Attorney General Pam Bondi said in a statement.

doc-with-drugsAbilify, the brand name for the prescription drug aripiprazole, was initially approved for treating schizophrenia, officials noted.

A complaint by Florida officials alleged the company promoted Abilify for use in elderly patients with symptoms consistent with dementia and Alzheimer’s disease despite a lack of federal approval for those uses. In 2006, Abilify received a boxed warning that such patients who are treated with antipsychotic drugs have an increased risk of death, state officials said.

In addition, the complaint asserted the company promoted Abilify for uses in children in ways that minimized and misrepresented the antipsychotic drug’s risks.

A settlement agreement requires the company to agree to guidelines for promoting “off-label” uses.

In a statement, Bristol-Myers Squibb  said it “denies any wrongdoing, and we are pleased to put this matter behind us so that we can focus on making transformational medicines for patients battling serious diseases.”

The company said it “chose this path to achieve a prompt and full resolution of potential state consumer protection act claims stemming from a multi-state coalition investigation relating to the marketing of Abilify, an atypical antipsychotic medication, which Bristol-Myers Squibb has not marketed since 2013.”

This settlement awaits court approval.

EpiPen ‘price gouging’ indefensible? ConsumersUnion pushes petition

epipenWant to inject yourself into the debate on drug prices? A national consumer advocacy group is reaching out with a petition it plans to drop next week at the headquarters of the company that raised prices about 450 percent on EpiPens.

The petition aims at drug maker Mylan. The company has jacked up prices on injectable drugs that can save a kid’s life in an allergy attack from around $100 for a pack of two to more than $600, while executive pay shot up by millions, advocacy group ConsumersUnion says.

New York’s Attorney General said Tuesday his office has begun an investigation into whether Mylan may have inserted “potentially anticompetitive terms” into its EpiPen sales contracts with local school systems.

“An EpiPen can save a child’s life during a sudden allergic reaction,” an email from ConsumersUnion, the policy and advocacy arm of Consumer Reports, said Tuesday. “But the recent absurd price hike by Mylan is putting this lifesaving drug out of financial reach for many families. Sign our petition to tell Mylan to stop putting people in danger and lower the cost of the EpiPen.”

The group says people can sign up at

Mylan CEO Heather Bresch commented on the company’s website, “We understand the deep frustration and concerns associated with the cost of EpiPen to the patient, and have always shared the public’s desire to ensure that this important product be accessible to anyone who needs it.”

Among other moves, the company has announced plans for a generic alternative that costs about $300 and enhanced payment assistance for buyers.

Controversial former pharmaceutical executive Martin Shkreli,  scrutinized for big drug price hikes in his own tenure, is a Mylan defender: “I think important medicines should be expensive because they’re valuable.”

A pharmaceutical group is launching an advertising campaign to defend drugmakers, Bloomberg reported.

“We’re under pressure and scrutiny like never before,” said Jim Greenwood, chief executive officer of the Biotechnology Innovation Organization. The “Innovation Saves” campaign emphasizes drugs can save lives and costs to the health-care system.


Wake up: $125M settlement can open eyes on why drugs costs so much

eyes openA settlement announced Thursday sheds light on why drug prices are so high.

Florida consumers will receive an estimated $2.4 million from a $125 million settlement  between 48 states and a drug maker accused of anti-competitive tactics.

Cephalon Inc., maker of the wakefulness drug Provigil and a unit of Teva Pharmaceuticals, settled charges it protected monopoly profits by delaying generic versions from entering the market for several years.

“These anti-competitive efforts cost Floridians millions of dollars and kept the price of this prescription drug artificially high,” Attorney General Pam Bondi said in a statement. “As a result of our joint efforts, millions of dollars will be will be paid to Florida and consumers.”

As a drug patent neared expiration, Cephalon “intentionally defrauded” the Patent and Trademark Office to secure an additional patent that a court subsequently deemed invalid and unenforceable, government officials said.

“Today’s settlement with the State Attorneys General will resolve Cephalon’s litigation with 48 States relating to an 11-year old settlement between Cephalon and various other companies,” said Teva spokeswoman Denise Bradley. “It will be funded from the proceeds of the settlement entered into in 2015 between Cephalon and the FTC (Federal Trade Commission).”

How did it work? Cephalon delayed generic competition for nearly six years by filing patent infringement lawsuits against all potential generic competitors, government officials said. Generic versions typically cost consumers much less.

Cephalon then settled those patent infringement lawsuits in 2005 and 2006 by paying the generic competitors to delay sale of the generic versions of Provigil until 2012, according to a summary from the Florida Attorney General’s Office.

The states’ settlement remains subject to court approval. It arose from an earlier settlement between Cephalon and the FTC that placed $1.2 billion into an escrow account.

‘Insane’ drug prices: Readers suggest tools to help

prescription drugsA Palm Beach Post story Sunday about high costs for prescription drugs asked for feedback from consumers, and one suggestion that came back is using online services that compare prices and offer coupons.

“If they do not know about it, readers should learn about web site,” suggested Eldon Bernstein, professor emeritus at Lynn University in Boca Raton.

Put in the drug name and your zip code and it will show prices local pharmacies charge, often with coupons the patient can print, he said.

“The prices can be insane – very often one pharmacy’s prices will be 80 percent (yes 80 percent) less,” Bernstein said.

As the Los Angeles Times reported about Santa Monica, Cal.-based GoodRx, the idea behind its launch about four years ago was to offer a resource for millions whose insurance coverage (or lack thereof) left them paying high drug costs, while also helping even those reasonably well-insured find generic medicines and other options that can be cheaper.

In 2013, Consumer Reports found GoodRx and WeRx useful, listing them as “two to try,” though it had reservations about a couple of other sites.

Consumer endorsements of GoodRx generally outnumber negative reviews at one online forum,, based on feedback through this summer.

Sunday’s story looked at a particularly expensive set of drugs that offer a high chance to cure hepatitis C, but the Post is interested in how the cost of other prescription drugs is affecting the lives of readers. And how about prescription drug advertising, which is allowed in the United States but heavily restricted in most countries — is it helping or hurting?

Email reporter Charles Elmore at or call (561) 820-4811.

Update: Also check out LowestMed, urged Ben Hibshman, its public relations manager.

“LowestMed was actually the first app and website to allow consumers to search prescription drug prices,” he said. “A good way to find deals is buy shopping around, since pharmacy prices vary by location. Prices also vary by which discount source and insurance is used, so it’s important consumers also search LowestMed.”

A Consumer Reports review mentions LowestMed as “one to consider,” saying it found the lowest prices on some drugs but lacked a “sort-by-distance” feature for local pharmacies.

Update 2: Reader Debra Tauber of Wellington found this stuff useful: “I am a retired teacher on Medicare & AARP. But I still cross reference my RX with both sites you mentioned I have saved up to $70.00  by using GoodRx. They are so user friendly and I was hesitant if my Walgreens would accept coupon. NO PROBLEM!! 3 Cheers for both sites.”

Florida shares in Pfizer $784 million drug settlement

prescription medsWyeth, owned by Pfizer Inc., has agreed to a $784 million settlement involving claims it underpaid Medicaid rebates for drugs that inhibit stomach acid, officials said Tuesday.

Florida will received $9.3 million as part of the settlement, the Florida Attorney General’s Office said.

The settlement, which arises from whistleblower cases in Massachusetts, involves the drugs Protonix Oral and Protonix IV. Government officials alleged the company avoided its obligation to pay Medicaid rebates to states.