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Lawsuit: Sick People In Missouri, Kansas Paid Higher Prices For Generic Drugs Due To Price-Fixing

The suit alleges that Teva Pharmaceuticals colluded with competing companies to carve up markets and raised prices on scores of generic drugs.

Missouri and Kansas have joined 41 other states and Puerto Rico in a lawsuit accusing generic drug makers of conspiring to manipulate and drive up prices for more than 100 generic drugs.

The 510-page lawsuit, filed in federal court in Connecticut, names 20 drug companies and 15 executives as defendants, alleging they participated in a conspiracy led by generic drug giant Teva Pharmaceuticals USA.

“We have hard evidence that shows the generic drug industry perpetrated a multi-billion dollar fraud on the American people,” Connecticut Attorney General William Tong said in a statement. “We have emails, text messages, telephone records, and former company insiders that we believe will prove a multi-year conspiracy to fix prices and divide market share for huge numbers of generic drugs.”

Tong, who is taking the lead in the case, announced the lawsuit Sunday night on “60 Minutes,” which aired a story about the case.

The lawsuit expands on an earlier case brought by Connecticut and 19 other states in December 2016. That lawsuit, which is pending, has since been joined by more than two dozen other states.

In a statement Monday, Missouri Attorney General Eric Schmitt called the alleged conspiracy “one of the most damaging and far-reaching price fixing schemes in modern history, with certain companies inflating prices by nearly 1,000%.”

“Millions and millions of Americans rely on generic prescription drugs every day to treat diabetes, infections, depression, cancer, HIV, and more,” Schmitt said. “This price fixing scheme by Teva Pharmaceuticals and other industry giants demonstrates a level of corporate greed the state of Missouri and the country rarely sees. By joining this lawsuit we’re sending a clear message to pharmaceutical companies: if you harm any of the 6 million people that call Missouri home, we will pursue action and hold you accountable for your actions.”

Teva Pharmaceuticals USA, which is based in Pennsylvania and is a wholly owned subsidiary of Israel-based Teva Pharmaceuticals Industries, denied wrongdoing in a statement .

“The allegations “are just that – allegations,” the company said.

“Teva continues to review the issue internally and has not engaged in any conduct that would lead to civil or criminal liability. Teva delivers high-quality medicines to patients around the world, and is committed to complying with all applicable laws and regulations in doing so. We will continue to vigorously defend the company.”

Teva subsidiaries operate out of two locations in Overland Park, Kansas, where until recently they employed about 350 people. The city and state granted Teva more than $53 million in tax abatements in 2013 to erect a $46 million, five-story headquarters building at College Boulevard and Nall Avenue, where it employed back office workers in its branded drug business. A smaller facility is located a few blocks away on 107th Street.

In December 2017, Teva announced plans to slash its global workforce by 25%. The local workforce has since been reduced, although it’s not clear by how much. A spokeswoman for Teva did not immediately respond to a query about how many people it now employs in the area.

The lawsuit filed Friday in Connecticut alleges that Teva significantly raised prices on more than 100 generic drugs beginning in July 2013 and colluded with competing companies to carve up markets and raise prices on at least 86 of those drugs.

The suit claims that the defendants coordinated their moves in person or by cell phone at golf outings, cocktail parties, industry dinners and other social occasions.

Besides Teva, the companies named in the suit are:

  • Actavis Holdco US, Inc.
  • Actavis Pharma Inc.
  • Amneal Pharmaceuticals Inc.
  • Apotex Corp.
  • Aurobindo Pharma U.S.A. Inc.
  • Breckenridge Pharmaceutical Inc.
  • Dr. Reddy’s Laboratories Inc.
  • Glenmark Pharmaceuticals Inc., USA
  • Greenstone LLC
  • Lannett  Company Inc.
  • Lupin Pharmaceuticals Inc.
  • Mylan Pharmaceuticals Inc.
  • Par Pharmaceutical Companies Inc.
  • Pfizer Inc.
  • Sandoz Inc.
  • Taro Pharmaceuticals USA Inc.
  • Upsher-Smith Laboratories LLC
  • Wockhardt USA LLC
  • Zydus Pharmaceuticals (USA) Inc.

Dan Margolies is a senior reporter and editor at KCUR. You can reach him on Twitter @DanMargolies.

Dan Margolies has been a reporter for the Kansas City Business Journal, The Kansas City Star, and KCUR Public Radio. He retired as a reporter in December 2022 after a 37-year journalism career.
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