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Thursday, December 15, 2016

20 States Sue 6 Drugmakers for Alleged Price-Fixing Scheme

© Srdjan Zivulovic / Reuters

Six generic drug companies, including Heritage Pharmaceuticals and EpiPen-maker Mylan NV, conspired to manipulate prices of two common drugs, 20 US states allege in a new lawsuit.

The lawsuit, filed Thursday in US District Court for the District of Connecticut, says that the six companies — which also include Mayne Pharma, Aurobindo Pharma, Teva Pharmaceuticals, and Citron Pharma LLC — participated in price manipulation of doxycycline hyclate, an antibiotic, and glyburide, a treatment drug for diabetics, Reuters reported.

Heritage Pharmaceuticals Inc. is named as the "ring leader" of the alleged scheme. A company spokesman said any price-fixing it conducted was the responsibility of executives that no longer work for Heritage.

The lawsuit is connected to a larger antitrust investigation by various states and federal law enforcement of more than two dozen generic drugmakers. Most of the companies are cooperating with authorities, and charges could come by the end of 2016, Bloomberg News reported last month.

The suit alleges that drug company executives and others "entered into numerous illegal conspiracies in order to unreasonably restrain trade, artificially inflate and manipulate prices and reduce competition" for the two drugs, the New York Attorney General's Office said in a statement.

"The defendants routinely coordinated their schemes through direct interaction with their competitors at industry trade shows, customer conferences and other events, as well as through direct email, phone and text message communications," the suit alleges, according to the New York Attorney General's Office, causing "significant, harmful and continuing effects in the country’s healthcare system."

In the suit, the 20 states allege that the companies understood their actions to be illegal and took steps to cover their conduct once they became aware of investigations into their activities.

Mylan has come under fire of late for price hikes of EpiPen, a vital device for people suffering from a life-threatening allergic reaction known as anaphylactic shock, which requires immediate treatment. The company also allegedly defrauded Medicaid over its EpiPen products.

"To date, we know of no evidence that Mylan participated in price fixing," company spokeswoman Nina Devlin told Reuters.

A Teva spokeswoman said the company is currently reviewing the suit, while the other three companies did not offer comment.

In addition to New York, the states suing the companies include Connecticut, Delaware, Florida, Hawaii, Idaho, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Minnesota, Nevada, North Dakota, Ohio, Pennsylvania, Virginia, and Washington.