Attorney General Adds Michigan to List of States in Generic Drug Collusion Lawsuit

By action of the state’s Attorney General, Michigan has joined the vast majority of other states across the nation in a broad-based lawsuit against many of the country’s largest generic drug manufacturers, as they allege a broad conspiracy to artificially inflate and manipulate prices while reducing competition and creating unreasonable restraint on trade for more than 100 different generic drugs.

Michigan Attorney General Dana Nessel has joined a coalition of 44 attorneys general in announcing the lawsuit against Teva Pharmaceuticals and 19 of the nation’s largest generic drug manufacturers.

The lawsuit, filed in U.S. District Court for the District of Connecticut, seeks damages, civil penalties and actions by the court to restore competition to the generic drug market.

The lawsuit also names 15 individual senior executive defendants at the heart of the alleged conspiracy who were responsible for sales, marketing, pricing and operations. The defendants’ drugs account for billions of dollars in sales in the country, and the alleged schemes increased prices affecting the health insurance market, taxpayer-funded health care programs like Medicare and Medicaid, and individuals who must pay artificially inflated prices for their prescription drugs.

The complaint alleges that Teva, Sandoz, Mylan, Pfizer and 16 other generic drug manufacturers engaged in a broad, coordinated and systematic campaign to conspire with each other to fix prices, allocate markets and rig bids for more than 100 different generic drugs.

The drugs span all types, including tablets, capsules, suspensions, creams, gels, ointments, and classes, including statins, ace inhibitors, beta blockers, antibiotics, anti-depressants, contraceptives, non-steroidal anti-inflammatory drugs, and treat a range of diseases and conditions from basic infections to diabetes, cancer, epilepsy, multiple sclerosis, HIV, ADHD, and more. In some instances, the coordinated price increases were more than 1,000-percent.

The complaint outlines an interconnected web of industry executives who met with each other during industry dinners, lunches, cocktail parties, golf outings and communicated via frequent phone calls, emails and texts to sow the seeds for their illegal agreements. Throughout the complaint, defendants use terms like “fair share,” “playing nice in the sandbox,” and “responsible competitor” to describe how they unlawfully discouraged competition, raised prices and enforced an ingrained culture of collusion.

Attorney General Nessel says, “Each day, people across the U.S. turn to generic drugs as an affordable alternative to name-brand medication,” and adds, “Michigan patients count on drug manufacturers to keep their prices affordable for life-saving medications. And when they don’t, when they collude to raise prices and line their pockets at the expense of the health and well-being of our residents, my office will hold them accountable.”

This is the second complaint to be filed in an ongoing and expanding investigation that has been referred to as possibly the largest cartel case in the history of the United States. The first complaint, still pending in 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.

In addition to Michigan, Alabama, Alaska, Arizona, Colorado, Connecticut, Delaware, Florida, Georgia, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New Jersey, New Mexico, New York, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina, Tennessee, Utah, Vermont, Virginia, Washington, West Virginia, Wisconsin and Puerto Rico joined the suit.

Corporate Defendants include:

Teva Pharmaceuticals USA, Inc.
Sandoz, Inc.
Mylan Pharmaceuticals Inc.
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.
Par Pharmaceutical Companies, Inc.
Pfizer, Inc.
Taro Pharmaceuticals USA, Inc.
Upsher-Smith Laboratories, LLC
Wockhardt USA, LLC
Zydus Pharmaceuticals (USA), Inc.

Individual defendants include:

Ara Aprahamian, Vice President of Sales and Marketing at Taro Pharmaceuticals U.S.A, Inc.
David Berthold, Vice President of Sales at Lupin Pharmaceuticals, Inc.
James Brown, Vice President of Sales at Glenmark Pharmaceuticals, Inc.
Maureen Cavanaugh, former Senior Vice President and Chief Commercial Officer, North America, for Teva
Marc Falkin, former Vice President, Marketing, Pricing and Contracts at Actavis
James Grauso, former Senior Vice President, Commercial Operations for Aurobindo from December 2011 through January 2014. Since February 2014, Grauso has been employed as the Executive Vice President, N.A. Commercial Operations at Glenmark
Kevin Green, former Director of National Accounts at Teva from January 2006 through October 2013. Since November 2013, Green has worked at Zydus Pharmaceuticals (USA) Inc. as the Vice President of Sales
Armando Kellum, former Vice President, Contracting and Business Analytics at Sandoz
Jill Nailor, Senior Director of Sales and National Accounts at Greenstone
James Nesta, Vice President of Sales at Mylan
Kon Ostaficiuk, the President of Camber Pharmaceuticals, Inc.
Nisha Patel, former Director of Strategic Customer Marketing and later, Director of National Accounts at Teva.
David Rekenthaler, former Vice President, Sales US Generics at Teva
Richard Rogerson, former Executive Director of Pricing and Business Analytics at Actavis
Tracy Sullivan DiValerio, Director of National Accounts at Lannett