Generic Drug Manufacturers Are Fixing Prices, Hurting Consumers

Attorney General Josh Shapiro announced the third lawsuit from the ongoing antitrust investigation into generic drug manufacturers who are artificially inflating and manipulating prices, costing consumers millions in Pennsylvania and throughout the United States.

Shapiro said the new complaint targets billions of dollars in sales from artificially inflated prices of more than 80 generic drugs, including gels, lotions, and topical solutions. The products are sold by the 26 companies and 10 individuals named in the complaint.

The lawsuit seeks disgorgement, restoration, civil penalties, costs and fees, and actions by the court to restore competition and competitive fairness to the generic drug market.

“The deeper we dig, the more we are finding how these companies have ripped off consumers in Pennsylvania,” said Attorney General Shapiro. “These drug companies are tied together at the hip — they profit while people who need affordable generic drugs suffer. We will continue to hold them accountable to restore competition in the marketplace.”

Between 2007 and 2014, three generic drug manufacturers, Taro, Perrigo, and Fougera (now Sandoz) sold nearly two-thirds of all generic topical products in the U.S. The multistate investigation has uncovered comprehensive, direct evidence of unlawful agreements to minimize competition and raise prices on dozens of topical products. The complaint alleges longstanding agreements among manufacturers to ensure a “fair share” of the market for each competitor, and to prevent “price erosion” due to competition.

The ongoing investigation includes evidence from several cooperating witnesses at the core of the conspiracy, a massive document database of over 20 million documents, and a phone records database containing millions of call detail records and contact information for over 600 sales and pricing individuals in the generics industry.

Among the records obtained by the States is a two-volume notebook containing the notes of one of the States’ cooperators, taken during phone calls with competitors and internal company meetings over a period of several years.

The first complaint, still pending in the U.S. District Court in the Eastern District of Pennsylvania, was filed in 2016 and now includes 18 corporate defendants, two individual defendants, and 15 generic drugs. Two former executives from Heritage Pharmaceuticals, Jeffery Glazer and Jason Malek, have entered into settlement agreements and are cooperating with the Attorneys General working group in that case.

The second complaint, also pending in the U.S. District Court in the Eastern District of Pennsylvania, was filed in 2019 against Teva Pharmaceuticals and 19 of the nation’s largest generic drug manufacturers. The complaint names 16 individual senior executive defendants. The States are currently preparing for trial on complaint #2.