Lawmakers, angered by 'polite f-u' letters, urge DoJ to get moving on generic price fixing probe

Two lawmakers urged the Department of Justice to prioritize its generic drug price fixing probe in the wake of a massive lawsuit by dozens of states. (skpy on Flickr)

It’s been years since the Department of Justice charged two Heritage Pharma executives in a generics price-fixing probe. Now, in the wake of a lawsuit filed by 44 states against 20 drugmakers, Sen. Bernie Sanders and Rep. Elijah Cummings say it’s time for the agency to get moving with its investigation and potential prosecution, including a probe into whether generic companies obstructed an earlier investigation.

In a letter to U.S. Attorney General William Barr and assistant attorney general for antitrust Makan Delrahim, Sen. Sanders and Rep. Cummings urged the DoJ to prioritize a generic drug price-fixing investigation and “pursue enforcement if warranted.” Two years ago, the DoJ charged two former Heritage execs as part of an “ongoing federal antitrust investigation,” the lawmakers pointed out, but the agency has been mostly quiet on the issue since then. 

The DoJ did announce a $225,000 criminal penalty against Heritage, which the lawmakers said is “wholly insufficient” to deter future misconduct. The company also paid more than $7 million in a separate civil resolution.

Aside from potential price-fixing, the lawmakers also want the DoJ to investigate whether certain companies obstructed their 2014 probe into the issue. They obtained—and published—an email from an unnamed sender to former Heritage CEO Jeff Glazer saying that representatives for top generic companies Mylan and Tevaplus the industry's trade groupwere in agreement to respond to the lawmakers' requests for information with “polite f-u" letters.

A Teva spokeswoman said the company "has been cooperating with all investigations and vigorously denies any of the alleged wrongdoing that has been circulated in the media."

Image courtesy of Sen. Sanders and Rep. Cummings

The lawmakers' latest letter comes in the wake of last month's lawsuit from 44 states against Teva Pharmaceutical Industries and 19 other drugmakers for alleged price-fixing on more than 100 meds. If the states' allegations are true, “civil enforcement will not be sufficient to protect consumers or businesses that compete fairly, maintain the integrity of our economic system, or deter anticompetitive conduct in the future,” Sen. Sanders and Rep. Cummings wrote. The companies have denied wrongdoing.

In their probe, states dug up “evidence that Teva and other companies coordinated with each other to mislead our offices’ investigation in 2014 into suspicious price increases of generic drugs," Sen. Sanders and Rep. Cummings wrote. The drugmakers' reasoning for raising prices—shortages, regulatory fees and more—were “grossly misleading” at best and “false statements to Congress” at worst, the lawmakers wrote.

The lawmakers asked the DoJ to update on its efforts by next Friday. 

The states filed their 500-plus-page lawsuit last month accusing Teva of being the main culprit in a wide price-fixing probe, but prosecutors say 19 other companies “willingly” got involved. They said the companies worked together to rig bids and divide the market, pushing prices higher and costing consumers and taxpayers billions of dollars. In addition to 20 companies, prosecutors named 15 executives in the complaint. 

Teva stressed that the lawsuit just presents allegations. A spokeswoman previously said the company "continues to review the issue internally and has not engaged in any conduct that would lead to civil or criminal liability." For its part, Novartis' Sandoz believes the claims are “without merit and will vigorously contest them," a representative said.