TRENTON, NJ – A Flemington man is among those sued by the state of New Jersey and a coalition of 43 other states alleging a conspiracy to artificially inflate the prices of more than 100 generic drugs, a violation of federal and state antitrust and consumer protection laws.
The suit was announced by state Attorney General Gurbir S. Grewal. It was filed in U.S. District Court in Connecticut.
Richard Rogerson, of the borough, is one of 16 individuals named in the lawsuit, which also targets 20 generic drug companies.
Rogerson is a former Executive Director of Pricing and Business Analytics at Actavis, the pharmaceutical firm formerly known as Watson Pharmaceuticals. Actavis is based in Ireland, but has adminstrtaive offcies in Parsippany.
More than half of the corporate defendants are based in New Jersey.
“We all know that prescription drugs can be expensive,” said Grewal in a press release. “Now we know that high drug prices have been driven in part by an illegal conspiracy among generic drug companies to inflate their prices.
“It is particularly troubling that so much of this unlawful conduct took place in New Jersey,” he said. “New Jersey’s pharmaceutical industry is the envy of the world. But no New Jersey company will get a free pass when it violates the law and harms our residents.”
The complaint alleges that price-fixing by the defendants has caused significant financial damage to state health plans, taxpayer-funded federal healthcare programs like Medicare and Medicaid, employer-sponsored health plans, and individual consumers who pay out-of-pocket for their generic medications.
Drugs subject to the unlawful pricing manipulations included all classes of medication, including oral antibiotics, blood thinners, cancer drugs, contraceptives, anti-inflammatory drugs, statins, anti-depressants, medications used to treat HIV, blood pressure medications, and many more.
The complaint alleges that the collusive activity peaked between July 2013 and January 2015, when one of the participants in the alleged conspiracy, Teva Pharmaceuticals USA, Inc., is alleged to have significantly raised prices on about 387 formulations of 112 different generic drugs. The size of the alleged price increases varies, but a number of drugs saw their prices soar by “well over 1,000 percent.”
A cornerstone of the conspiracy, the complaint alleges, was an understanding among the defendant companies that they would cooperate on pricing so each company could maintain a “fair share” of the various generic drug markets. At the same time, the companies also colluded to “significantly raise prices on as many drugs as possible.”
Knowing their actions were illegal, corporate conspirators generally chose to talk in person or by cell phone, so as not to create a written record of their conduct, the complaint asserts.
During their conversations, the defendant executives frequently used coded terms like “playing nice in the sandbox” and “responsible competitor” to describe their anti-competitive efforts and to reference the industry’s engrained culture of collusion.
The industry’s many posh trade shows, cocktail parties, dinners, conferences, golf outings and other events provided opportunities for such face-to-face discussions, the complaint notes. And when communications were reduced to writing or text messages, the defendants often “took overt and calculated steps to destroy evidence” of them.
Much of the anti-competitive conduct allegedly occurred in New Jersey. For example, the complaint identifies a January 2014 “industry dinner” at a steakhouse in Bridgewater, which was attended by at least 13 high-ranking executives from more than five companies.
The complaint alleges violations of the Sherman Act, a federal antitrust law, as well as violations of numerous state laws, including New Jersey’s Antitrust Act and Consumer Fraud Act.
The lawsuit seeks damages, civil penalties and actions by the court to restore competition to the generic drug market.
Corporate defendants named in today’s lawsuit include:.
- Teva Pharmaceuticals USA, Inc., North Wales, Pa.
- Sandoz, Inc., Princeton
- Mylan Pharmaceuticals Inc., Canonsburg, Pa.
- Actavis Holdco US, Inc., Parsippany
- Actavis Pharma, Inc., Parsippany
- Amneal Pharmaceuticals, Inc., Bridgewater
- Apotex Corp., Weston, Fla.
- Aurobindo Pharma U.S.A., Inc., Dayton
- Breckenridge Pharmaceutical, Inc., Fairfield
- Dr. Reddy’s Laboratories, Inc., Princeton
- Glenmark Pharmaceuticals Inc. USA, Mahwah
- Greenstone LLC, North Peapack
- Lannett Company, Inc., Philadelphia, Pa.
- Lupin Pharmaceuticals, Inc., Baltimore, Md.
- Par Pharmaceutical Companies, Inc., Chestnut Ridge, NY
- Pfizer, Inc., New York, NY
- Taro Pharmaceuticals USA, Inc., Hawthorne, NY
- Upsher-Smith Laboratories, LLC, Maple Grove, Mn.
- Wockhardt USA, LLC, Parsippany
- Zydus Pharmaceuticals (USA), Inc., North Pennington