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AG Derek Schmidt: Kansas files third lawsuit alleging antitrust price-fixing in generic drug industry

Release Date: Jun 10, 2020

TOPEKA – (June 10, 2020) – Kansas has filed a third lawsuit stemming from its 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, Attorney General Derek Schmidt announced today.

The lawsuit, filed today 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 names 26 corporate defendants and 10 individual defendants. It seeks damages, civil penalties and actions by the court to restore competition to the generic drug market. 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. 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 new complaint, brought by a coalition of 51 states and territories including Kansas, is the third to be filed in an ongoing, expanding investigation into generic drug price fixing. 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. 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. 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.

A copy of the complaint filed today is available at https://bit.ly/2YjIRWo

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