USA lawsuit accuses drugs firms of inflating costs

William Tong in East Hartford Connecticut

Seven Indian drug makers, including Sun Pharmaceutical Industries Ltd and Dr Reddy's Laboratories Ltd, and five of their executives have been named in a United States lawsuit that accuses Israel's Teva Pharmaceutical Industries Ltd of orchestrating a conspiracy to raise medicine prices.

Then, starting in 2012, the suit alleges that Teva and the other companies colluded to not only maintain their respective shares of the market, but raise prices on as many drugs as possible, with a particular focus on what it called "High Quality" competitors, whose products overlapped with its own.

Mike McClellan told a conference in Israel that the suit was an amended one and not new, while stressing it was civil and not criminal.

The lawsuit also names 15 senior executive defendants responsible for sales, marketing, pricing and operations.

Prosecutors said Teva Pharmaceuticals USA Inc had orchestrated to inflate drug prices - sometimes by more than 1,000% - and stifle competition for generic drugs.

In a press statement, Teva responded saying: "The allegations in this new complaint, and in the litigation more generally, are just that-allegations".

Teva's Tel Aviv-listed shares were down almost 11 percent in afternoon trading.

Teva's stock was the clear underperformer among the group as the Israel-based company was singled out by NYT for raising prices on almost 400 formulations of 112 generic drugs.

The suit contends that this resulted in "many billions of dollars of harm to the national economy over a period of several years". A coalition lead by CT, initially joined by 19 other states, filed the first suit in December 2016. "The size of the price increases varied, but a number of them were well over 1,000%", according to the court document.

The suit says that the defendants knew their conduct was unlawful and usually chose to communicate in person or by cell phone "in an attempt to avoid creating a written record of their illegal conduct".

'The company delivers high-quality medicines to patients around the world and is committed to complying with all applicable laws and regulations in doing so'.

The 500-page lawsuit accuses the generic drug industry, which mainly sells medicines that are off patent and should be less expensive, of a long history of discreet agreements to ensure that companies that are supposedly competitors each get a "fair share".

Mylan received similar backlash when it raised the price of a two-injection EpiPen set from $100 to $600.

Teva, which has denied any wrongdoing, said it would defend its actions.

According to the complaint, filed in federal court in Connecticut, "Teva is a consistent participant in the conspiracies identified in this complaint, but the conduct is pervasive and industry-wide". The first, filed in 2016, named 18 corporate defendants and two individual defendants.



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