Years into a government probe over alleged generic drug price fixing, investigators have expanded the scope to include 300 drugs and 16 companies, an official told The Washington Post.
Connecticut Assistant Attorney General Joseph Nielsen told the Post it’s “most likely the largest cartel in the history of the United States.” And he knows the allegations well: Connecticut Attorney General George Jepsen has been investigating generic pricing collusion since 2014 in a probe that started with just two drugs. So far, the investigation has already yielded guilty pleas from two former executives of Heritage Pharmaceuticals who are now cooperating with investigators.
Some of the biggest names in generic drugs, such as Teva and Mylan, have been swept up in the investigation. The drugmakers have denied wrongdoing.
Led by Jepsen's office, a group of states are proceeding with legal claims as federal officials continue their own investigation. In an amended lawsuit filed last October, 46 states alleged price fixing on 15 drugs. Now, 47 states are involved, The Washington Post reports. In the suit, states say the companies referred to the generic drug market as the “sandbox” where they were supposed to “play nice.” Last month, a judge ruled that 1 million emails, texts and documents could be shared as evidence by the plaintiffs, according to the Post.
In a note Monday, Bernstein analyst Ronny Gal said there’s “some risk” for industry players as detailed in the Post article. But many companies have expressed that “they believe they are in the clear,” Gal said. His team believes that faith stems from their own lawyers' investigations of communications among the companies. If more legal action comes in the form of a federal antitrust case, that would be “much more serious,” Gal wrote.
Back in April, Bloomberg reported that the feds were nearly ready to charge drugmakers and executives after nearly four years of investigating.