District and Four States Sue Drug Companies for Price-Fixing Conspiracy in Sales of Popular Generic Drugs

Suit Brings Number of Attorneys General Suing Companies to 45

WASHINGTON, D. C. – Attorney General Karl A. Racine today announced that the District of Columbia has joined with four other states in filing a lawsuit against several manufacturers of generic drugs for allegedly conspiring to fix drug prices, thwart competition, and engage in illegal and anti-competitive trade practices with regard to two drugs. The lawsuit alleges that the manufacturers’ actions have caused significant harm to the nation’s healthcare system.

“District residents rely on the availability of reasonably priced generic drugs to make the medications they need more affordable. We will not tolerate drug companies manipulating markets and increasing their profits at consumers’ expense,” said Attorney General Racine. “It is unacceptable for companies to flout federal and state laws that are designed to protect consumers.”

The suit was filed in U.S. District Court for the District of Connecticut against six drug companies: Heritage Pharmaceuticals, Inc.; Aurobindo Pharma USA, Inc.; Citron Pharma, LLC; Mayne Pharma (USA), Inc.; Mylan Pharmaceuticals, Inc.; and Teva Pharmaceuticals USA, Inc. It alleges that these companies entered into illegal conspiracies in order to unreasonably restrain trade, artificially inflate and manipulate prices and reduce competition in the United States for two drugs: doxycycline hyclate delayed release, an antibiotic; and glyburide, an oral diabetes medication.

This latest suit mirrors an ongoing action in the same court in which 40 state attorneys general allege violations of federal and state antitrust laws and state consumer protection laws against the same six defendants. Today’s suit brings the number of attorneys general suing the companies over the alleged misconduct to 45.

In July 2014, the State of Connecticut initiated an investigation into the reasons behind suspicious price increases of certain generic pharmaceuticals. The investigation, which is still ongoing as to a number of additional generic drugs, generic drug companies and key executives, uncovered evidence of a well-coordinated and long-running conspiracy to fix prices and allocate markets for the two drugs.

The complaint alleges that the defendants routinely coordinated their schemes through direct interaction with their competitors at industry trade shows, customer conferences, and other events. It also alleges the defendants coordinated their unlawful conduct through direct email, phone and text message communications. The alleged anticompetitive conduct – including efforts to fix and maintain prices, allocate markets and otherwise thwart competition – caused significant, harmful and continuing effects in the country’s healthcare system, the states allege.

The states further allege that the drug companies knew that their conduct was illegal and made efforts to avoid communicating with each other in writing or, in some instances, to delete written communications after becoming aware of the investigation. The states are asking the court to enjoin the companies from engaging in illegal, anticompetitive behavior and for equitable relief, including substantial financial relief, to address the violations of law and restore competition.

The multistate investigation and related litigation are being led by the Connecticut Attorney General. The lawsuit was filed under seal, with portions of the complaint redacted in order to avoid compromising the ongoing investigation. The redacted lawsuit is attached.