Rutledge Files Complaint in Ongoing Antitrust Price-Fixing Investigation into Generic Drug Industry
June 11, 2020
Names 26 Corporate Defendants, 10 Individual Defendants in Conspiracy to Fix Prices and Allocate Markets for at least 80 Generic Topical Dermatological Drugs
LITTLE ROCK – Arkansas Attorney General Leslie Rutledge joined a coalition of 51 states and jurisdictions in filing the third lawsuit stemming from the ongoing antitrust investigation into a widespread conspiracy by generic drug manufacturers to artificially inflate and manipulate prices, reduce competition and unreasonably restrain trade for generic drugs sold across the United States. This new Complaint, filed in the U.S. District Court for the District of Connecticut, focuses on 80 topical generic drugs that account for billions of dollars of sales in the United States. The Complaint targets Taro Pharmaceuticals USA Inc., Perrigo, New York, Inc., and Sandoz Inc., along with 23 other corporate Defendants and 10 individual Defendants.
“Generic drug companies have been manipulating drug prices that directly harm Arkansans’ pocketbooks,” said Attorney General Rutledge. “Drug prices have skyrocketed in recent years due to fraudulent agreements between generic drug companies and their competitors and this litigation will hold these companies accountable for their illegal collaboration to reap massive profits.”
The topical drugs at the center of the Complaint include creams, gels, lotions, ointments, shampoos, and solutions used to treat a variety of skin conditions, pain, and allergies.
Between 2007 and 2014, three generic drug manufacturers, Taro, Perrigo, and Fougera (now Sandoz) sold nearly two-thirds of all generic topical products dispensed in the United States. The multistate investigation has uncovered comprehensive, direct evidence of unlawful agreements to minimize competition and raise prices on dozens of topical products. Based on evidence gathered from a massive document database of over 20 million documents, phone records, and the cooperation of several witnesses, 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 lawsuit seeks damages, civil penalties, and actions by the court to restore competition to the generic drug market.
The Complaint is the third to be filed in an ongoing, expanding investigation that the Connecticut Office of the Attorney General has referred to as possibly the largest domestic corporate cartel case in the history of the United States. 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. 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 that Complaint.
Rutledge joined attorneys generals in the lawsuit, led by Connecticut, from Alabama, Alaska, Arizona, Colorado, Delaware, District of Columbia, Florida, Georgia, Territory of Guam, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico, New York, North Carolina, North Dakota, Northern Mariana Islands, Ohio, Oklahoma, Oregon, Pennsylvania, Puerto Rico, Rhode Island, South Carolina, Tennessee, Utah, U.S. Virgin Islands, Vermont, Virginia, Washington, West Virginia and Wisconsin in filing the complaint.