St. Louis Record

Monday, April 6, 2020

Law professor: Allegations of generic drug price fixing 'as bad as it gets'

By John Breslin | Jun 21, 2019


JEFFERSON CITY – Drug companies agreeing not to compete and to fix prices of generic prescription medications is as "bad as it" can get under anti-trust rules, according to one legal expert in corporate law.

Missouri has joined 43 states and Puerto Rico in a suit against Teva, 19 other manufacturers and 15 individuals involved in marketing the drugs.

The suit, led by Connecticut and filed in the U.S. District Court for the District of Connecticut, claims "Teva and its co-conspirators embarked on one of the most egregious and damaging price-fixing conspiracies in the history of the United States.”

In a statement published by several news organizations, Teva stated the claims contained in the suit were "just that - allegations."

Thom Lambert, law professor and the Wall Chair in corporate law and governance at the University of Missouri, said he was not aware of a suit of this type and scope taken by so many state law enforcement officials.

The claims are that the pharmaceutical companies engaged in price fixing and divided up the market, Lambert said.

"I am not aware of a similar case involving such blatant alleged price fixing involving drug companies," Lambert said, adding that this is a market division claim, and it appears there is "smoking gun evidence."

"If that is true, it is about as bad as it gets in anti-trust terms," Lambert said.

The suit states that over a near two-year period beginning in mid-2013, Teva increased prices on 112 generic drugs and that its employees conspired with competitors, including Sandoz, Mylan and Pfizer, to ensure they followed the hikes or did not compete with a different product. The price increases varied but included a hike of nearly 1,000 percent, according to the complaint.

The alleged price fixing scheme involved a range of drugs and medications used to treat everything from simple infections to diabetes, cancer, epilepsy, multiple sclerosis, HIV and ADHD. It is alleged the scheme caused “many billions of dollars of harm to the national economy over a period of several years,” the suit states.

“Millions and millions of Americans rely on generic prescription drugs every day to treat diabetes, infections, depression, cancer, HIV, and more,” Missouri Attorney General Eric Schmitt said in a statement after announcing in May his office joined the suit. “This price fixing scheme by Teva Pharmaceuticals and other industry giants demonstrates a level of corporate greed the state of Missouri and the country rarely sees. By joining this lawsuit we’re sending a clear message to pharmaceutical companies: if you harm any of the 6 million people that call Missouri home, we will pursue action and hold you accountable for your actions.”

In a statement, Pennsylvania-based Teva Pharmaceuticals, a wholly owned subsidiary of its Israeli parent company, stated, “The allegations “are just that – allegations."

The statement continued, "Teva continues to review the issue internally and has not engaged in any conduct that would lead to civil or criminal liability. Teva delivers high-quality medicines to patients around the world, and is committed to complying with all applicable laws and regulations in doing so. We will continue to vigorously defend the company,” KCUR reported.

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Organizations in this Story

University of Missouri Law SchoolMissouri Attorney General