States sue generic drugmakers, allege price-fixing scheme

14 2016 shows tablets and capsules in Paris

14 2016 shows tablets and capsules in Paris

According to the lawsuit by the 40 states, the defendants inflated the prices of more than 100 drugs.

Connecticut Attorney General William Tong, a Democrat, said investigators obtained emails, text messages and telephone records to prove a multi-year conspiracy against 20 firms.

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

The suit, in the U.S. District Court for the District of CT, includes 43 states and Puerto Rico - led by CT - and Israel-based Teva Pharmaceutical Industries, along with more than a dozen other generic drugmakers.

The 500-page lawsuit, filed Friday in the U.S. District Court in CT, is seeking damages, civil penalties and actions by the court to restore competition to the generic drug market.

With Teva at the center of the conspiracy, the drug companies colluded to significantly raise prices on 86 medicines between July 2013 and January 2015, the complaint said.

The suit says that in 2012, companies chose to "take this understanding to the next level", embarking on "one of the most egregious and damaging price-fixing conspiracies in the history of the United States".

A complete list of the states filing the suits and the drug makers can be found here.

"We all know that prescription drugs can be expensive", said New Jersey Attorney General Gurbir S. Grewal in a statement.

The suit alleges that the generic drugmakers had for years avoided competing with each other - and thus keeping prices down - and instead deliberately divided the market according to their "fair share" of customers, which created an artificial equilibrium in the market.

"There have been no developments in this area", he said.

The lingering financial troubles, dating back to Teva's loss of it copyrights on several generic drugs, present enormous challenges for Teva CEO Kåre Schultz, a Danish business executive who was appointed in 2017 based on his rare ability to carry out unsentimental purges of failing companies.

The suit says that the size of the price increases varied but was over 1,000 percent for a number of the drugs.

"Teva continues to review the issue internally and has not engaged in any conduct that would lead to civil or criminal liability".

The civil suit is asking for a finding that the defendants' actions violated federal and state antitrust and consumer protection laws and is seeking a permanent injunction preventing the companies from continuing the conduct.

Teva, which has denied any wrongdoing, said it would defend its actions. The first, filed in 2016, named 18 corporate defendants and two individual defendants.

Two former drug company executives entered into settlement agreements in that case and are now cooperating with investigators.