Generic Price-Fixing of Medications Under Focus in Several States

A lawsuit filed in U.S. District Court, District of Connecticut on July 17, 2017 is highlighting a current issue of the alleged generic price-fixing of certain medications by drug companies.

In this lawsuit, the States of Arkansas, Missouri, West Virginia and New Mexico along with the District of Columbia are accusing a handful of drug companies of colluding on a generic price-fixing scheme to raise and maintain prices of key generic drugs that patrons rely upon to keep a budget.

The companies named as defendants in this case are Aurobindo Pharma USA Inc., Citron Pharma LLC, Mayne Pharma USA Inc., Mylan Pharmaceuticals Inc. and Teva Pharmaceuticals USA Inc. The lawsuit is based upon an ongoing investigation by the State of Connecticut that began in 2014.

The investigation looked at potential generic price-fixing of certain medications whose cost dynamic was atypical of other drugs being released from patent into the realm of generic offerings. The drugs that are being looked at in this first case are Doxycycline Hyclate Delayed Release (Doxy DR) and Glyburide.

Typical Generic Cost Dynamic and Generic Price-Fixing

As outlined in the redacted public copy of this drug generic price-fixing lawsuit, the price of a generic drug after the brand has released it from patent depends upon the number of generic manufacturers entering the market.

Usually, it starts with one manufacturer offers a generic drug at just slightly cheaper than the brand name because of the lack of generic competition.

When manufacturing competition grows to two competing generic sellers, the cost of the drug can fall to half that of its brand name counterpart, which is a great advantage to consumers. As more companies enter the game, however, prices don’t drop as radically and settle around 20% less than the brand name medication.

Because this typical cost dynamic was not followed on these two drugs and countless other generic medications, public complaints and reports rose remarkably, causing the initiation of the 2014 investigation.

Consumers noted a doubling and even tripling of their costs in some situations, forcing them to live outside their means to get the most basic treatment for sometimes very serious conditions.

The investigation also sparked a congressional inquiry into potential generic price-fixing and the involvement of the United States Department of Justice (DOJ) antitrust division.

According to the legal documentation of this generic price-fixing case, standard business operating procedures in generic drug manufacturing put executives in close personal contact with their competitors on a regular basis. There are routine industry trade shows and customer conferences allowing for ongoing communication between companies in the form of executive lunches, dinners, and parties.

The accused pharmaceutical companies are alleged to have engaged in frequent communications at these events, establishing relationships that allowed for the creation of anti-competitive schemes. The alleged schemes involved agreements among each other about how much market share and which customers each was entitled to lay claim. The agreement could be covered over by each manufacturer putting in a lame duck bids, acting as if the intent was to compete when it was not.

Do you Feel You Have Been the Victim?

If you reside in the States of Hawaii, Massachusetts, Missouri, Montana, Rhode Island, Vermont or the District of Columbia, and feel like you have been the victim of generic price-fixing of medications, you may be eligible to participate in a free generic price-fixing class action investigation.

Join a Free Generic Prescription Drugs Price-Fixing Class Action Lawsuit Investigation

If you live in the District of Columbia, Hawaii, Massachusetts, Missouri, Montana, Rhode Island or Vermont and purchased prescription generic drugs, you may qualify to participate in this price-fixing class action lawsuit investigation.

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