More states pour into generics price-fixing probe, suing Mylan, Teva and others

Arkansas, West Virginia, New Mexico, Missouri and the District of Columbia sued six makers of generic drugs for alleged collusion this week.

The price-fixing allegations against generics makers just keep piling up. Four states and the District of Columbia kicked off new efforts this week to fight alleged collusion, filing a lawsuit against Mylan, Teva and other industry players.

Arkansas, West Virginia, New Mexico, Missouri and the District of Columbia sued six makers of generic drugs for alleged price fixing on delayed-release antibiotic doxycycline hyclate and the diabetes drug glyburide. In their lawsuit, the states say the industry’s collusion stretched far beyond those two drugs, but they are initially focusing on that pair.

The new lawsuit compounds the pressure on top generics makers that face other state-level legal actions and a Department of Justice investigation into allegations they worked together to set prices for key copycat drugs.

According to the complaint, generic drug industry players used industry conferences and trade shows as venues to “develop relationships and sow the seeds for their illegal agreements.” The defendants conducted the price-fixing scheme through meals, nights out, parties and remote communications, the states contend.

The companies knew the conduct was illegal, the lawsuit claims. Some employees took “overt and calculated steps” to destroy evidence of their communications by text or in writing, the lawsuit states. Many top execs knew of the arrangements, according to the suit.

RELATED: States follow feds with accusations of generic price fixing against Mylan, Heritage, others

Responding to a request for comment, a Mylan spokesperson said: “To date, we know of no evidence that Mylan participated in price fixing.” A Teva representative said the company “denies having engaged in any conduct that would give rise to liability with respect to this lawsuit.”

The states join 20 others in taking on the same set of drug companies for alleged collusion on the same drugs, with that suit filed late last year.

In a statement, a Heritage Pharma spokesperson said an internal investigation last August “revealed a variety of serious misconduct” by two execs who have been terminated.

“We are fully cooperating with all aspects of the Department of Justice’s continuing investigation,” a company spokesperson said. She added that Heritage has “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,” Heritage’s representative said via email.

RELATED: Ex-Heritage execs turn state's evidence in far-reaching generic pricing probe

Since they were charged by U.S. authorities, those Heritage execs—former CEO Jeffrey Glazer and former president Jason Malek—have inked settlements to pay $25,000 and cooperate with the ongoing price-fixing investigation.

In announcing the settlement deal in May, Connecticut Attorney General George Jepsen said the two men's cooperation “will significantly strengthen our ability to prosecute the litigation and further our investigation."

Aurobindo, Mayne Pharma and Citron were also named as defendants in the new suit.

Connecticut kicked off the investigation into possible collusion back in 2014 because of “unexplained and suspicious” price increases in the generics sector, according to the new lawsuit. A congressional inquiry and Department of Justice investigation followed.