Mylan President Rajiv Malik and Emcure CEO Satish Mehta were named individually in a vastly expanded civil lawsuit over generic price fixing brought by nearly every state in the country. The price-fixing lawsuit now includes Sandoz and a host of other top drugmakers, which have been accused of colluding to keep drug prices artificially high.
The expanded lawsuit alleges generic drug price fixing by 18 companies and two individual defendants on 15 medicines, more than tripling the number of defendants from the original complaint and significantly expanding the number of medications. Previously, authorities alleged price fixing on two drugs.
New companies in the suit include Sandoz, along with Actavis, Apotex, Dr. Reddy's, Glenmark, Lanett, Par, Sun Pharma and Zydus, according to a fact sheet (PDF) released by Connecticut Attorney General George Jepsen's office Tuesday.
In a statement put out Tuesday, Mylan said it has "deep faith" in Malik's integrity and "stands behind him fully." The company has been conducting its own internal investigation and hasn't found evidence of price fixing, according to the statement.
"Mylan and Rajiv Malik both intend to defend this case vigorously, and we look forward to the opportunity to present a full defense," the company said.
The states are charging executives in order to deter future price fixing, according to the fact sheet. 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 claimed.
"In this instance, considering the personal conduct of the individuals in furthering the price-fixing scheme, and the brazen and broad nature of the scheme, we believe suing individuals is justified and will send a powerful message deterring this type of conduct," the officials wrote, noting that some states opted out of suing individuals.
Serving as a president and executive director, Malik is a top executive at Mylan, a leading generic company. The drugmaker's shares were down about 8% after the news hit.
Mehta is CEO of Emcure, which owns Heritage Pharmaceuticals, a company that was involved early on in the price-fixing scandal. Former Heritage executives in May agreed to cooperate with the investigation in exchange for reduced punishments. The DOJ charged the Heritage executives late last year.
Connecticut kicked off the price-fixing probe in 2014 after noticing "suspicious" hikes on certain generics, according to a release. Now, 46 states are involved in the filing, according to Connecticut Attorney General George Jepsen. The Department of Justice also has a probe into generic pricing practices.
The sheet put out by Jepsen's office referenced the initial complaint—filed late last year—as covering the "tip of the iceberg" of generic pricing collusion.
"Alarmingly, we do believe the conduct is even more pervasive, and we continue to investigate with the likelihood of further expansions of the complaint at the appropriate time," the sheet said.