Feds may sue generic drugmakers to recover damages: official

The Department of Justice might sue to recover damages as a result of its generic price fixing probe, according to an official. (Ryan J. Reilly /Flickr/CC BY 2.0)

Federal investigators have been looking into possible price fixing at top generic drugmakers for years, and on Friday, a top Department of Justice official signaled what his agency might do next. 

If taxpayers have been overcharged due to collusion, the DOJ "will get involved on the civil side and recover damages for the U.S. government," Assistant Attorney General for the antitrust division Makan Delrahim said at George Mason University, according to Bloomberg. 

“To the extent that taxpayers have had to pay that bill, I think the taxpayers should recover,” he said, as quoted by the news service. 

The price fixing issue has been weighing on generic drugmakers for several years, as Bloomberg first reported in November 2016 that officials were considering charges following a multiyear investigation. 

Connecticut's Attorney General George Jepsen started an investigation way back in 2014 after noticing "suspicious" hikes on certain generics, according to a release from his office.

Last year, nearly every state in the country joined a civil suit against Mylan President Rajiv Malik, Emcure CEO Satish Mehta and 18 companies. The states alleged price fixing on 15 drugs by Mylan, Teva, Sandoz and other drugmakers.

At the time, Jepsen released a fact sheet describing the conduct as "even more pervasive" than described in the lawsuit. The states could expand the complaint later, according to the document. 

Delrahim backed that sentiment up on Friday, saying the investigation is "very broad," according to Bloomberg. 

Moving to get more information about the alleged deals, investigators in May inked settlements with former executives of small generics company Heritage Pharma in exchange for their cooperation in the probe. Jepsen said in a statement the deal "will significantly strengthen our ability to prosecute the litigation and further our investigation."

By targeting company executives, the states hope to deter future price fixing, according to Jepsen's office. Malik and Mehta were "directly involved in conceiving an illegal agreement and taking affirmative steps to ensure it was executed by their subordinates," the states have said.

Mylan responded that it has "deep faith" in Malik and that its own internal investigation hadn't found any evidence of price fixing.