Along with the rising cases of COVID-19 comes another big blow for pharma companies. Recently a multi-state lawsuit has been filed in the District Court of Connecticut, USA against 26 drug makers. The lawsuit was filed by Maryland Attorney General alleging that the 26 firms were involved in a broad conspiracy to artificially inflate and manipulate prices of drugs to reduce competition and thereby unreasonably restrain trade for generic drugs sold across the USA. Among these firms, 5 Indian drug giants Sun Pharmaceuticals, Aurobindo Pharma, Lupin, Wockhardt and Glenn mark pharmaceuticals are also believed to be involved in this conspiracy. They are among the 26 drug makers facing a multi-state lawsuit in the US over allegations of anti-competitive practices to reduce competition.
Attorney General Brian E Frosh released a statement on Wednesday saying the new complaint, filed in the District Court for the District of Connecticut, USA focuses on 80 topical generic drugs that account for billions of dollars of sales in the United States. These drugs include betamethasone creams and lotion, nystatin ointment, clobetasol propionate gel, among others. And the complaint has clearly named 26 corporate defendants and nearly 10 individual defendants. The lawsuit further seeks damages, civil penalties against the accused firms and actions by the court to restore the competition back to the generic drug market.Taro Pharmaceuticals which is a Sun Pharmaceuticals subsidiary and its chief commercial officer Michael Perfetto are also among the defendants involved in the case filed by Maryland attorney general Brian E. Frosh.
A multi state led investigation has uncovered direct and comprehensive evidence of unlawful agreements to minimize the competition further and raise prices on dozens of topical drugs. The complaint also alleges longstanding agreements among firms to ensure a fair share of the market for each competitor, and to prevent price erosion due to amplified competition. The complaint also sheds light on a tangled web of industry executives and salespeople who met with each other on social meetings and at trade shows to discuss the groundwork for illegal agreements.According to the complaint the topical drugs at the mentioned in the complaint include creams, lotions, gels, shampoos, ointments, and other topical solutions used to treat a variety of skin conditions, allergies and pain. This complaint breeds from an ongoing investigation built on evidence from several witnesses involved in the conspiracy. A huge document database of over 20 million documents, and several phone records database containing millions of call records and contact information for over 600 sales individuals involved in the generic medicine industry. Authorities have also seized a two-volume notebook containing the detailed notes of one of the State’s cooperators who was involved in this drug pricing conspiracy.
This is the third complaint to be filed in an ongoing investigation against the firms and is probably the largest domestic corporate cartel case in the entire history of the United States.The first complaint which is still pending in the District Court in the Eastern District of Pennsylvania, USA was filed in 2016 and now includes 18 corporate defendants, two individual defendants, and nearly 15 generic drugs. The second complaint which is also pending in the District Court in the Eastern District of Pennsylvania, USA was filed in the year 2019 against Teva Pharmaceuticals and 19 of the country’s largest generic drug manufacturers. This complaint names 16 individual senior executive Defendants. And now Maryland and the other states are currently preparing hard for trial on that complaint. This complaint was filed in against generic drug manufacturers like Sun Pharma, Zydus Cadila, Lupin, Glenn mark pharmaceuticals, Aurobindo Pharma, Wockhardt among the companies then.
According to the attorneys involved in the lawsuit, the generic drug manufacturers perpetrated a multibillion-dollar fraud on the American public so systematically that it has touched the lives of every single consumer of topical/dermatological products. Through phone calls, emails, text messages, corporate conventions and cosy dinner parties, these generic pharmaceutical executives were in constant talks to fix prices and restrain competition as though it were a standard course of business for them. The firms knew what they were doing is wrong, and they took severe steps to evade accountability by using code words and warning each other to avoid email and call tracing.
Also between 2007 and 2014, three major generic drug manufacturers, Taro, Perrigo and Fougera (now with Sandoz) sold almost two-thirds of all the generic topical products dispensed in the US.