Actavis, Teva, Mylan Face Pravastatin Price-Fixing Class Action Lawsuit

An antitrust lawsuit has been filed against drug makers Actavis, Mylan, Teva and others, alleging they conspired to fix the price of the generic cholesterol medication pravastatin sodium.

Filed in Pennsylvania federal court, a New York City police department union – the Detectives Endowment Association of the City of New York – alleges the Big Pharma companies conspired to artificially inflate the prices of pravastatin sodium tablets, which help lower cholesterol and reduce the risk of heart attack.

Specifically, the lawsuit names Actavis Holdco U.S. Inc., Apotex Corp., Dr. Reddy’s Laboratories Inc, Glenmark Pharmaceuticals Inc. USA, Lupin Pharmaceuticals Inc., Mylan Inc., Teva Pharmaceuticals USA Inc. and Zydus Pharmaceuticals (USA) Inc. as defendants.

“Defendants orchestrated their conspiracy through secret communications and meetings, both in private and at public events, such as trade association meetings held by the [Generic Pharmaceutical Association], among others,” the union said in its complaint. “Oligopolistic conditions — e.g., low numbers of competitors and barriers to entry in the market for pravastatin sodium — facilitated defendants’ anti-competitive actions and have allowed them to sustain their unlawful supracompetitive pricing to the present.”

According to the antitrust lawsuit, pravastatin recently underwent unprecedented price increases of between 300 to 600 percent. These price spikes, the lawsuit says, are the result of deliberately orchestrated, secret communications between the defendants.

The Detectives Endowment Association notes that in October 2013, the price of a 500-count bottle of 10-milligram pravastatin tablets was $27, and by April 2014, that price had soared to $196, a 573 percent increase.

One theory the complaint puts forth with regard to why the defendants would want to charge more for an inexpensively produced generic like pravastatin is the inherent structure of the market for the drug. The lawsuit notes pravastatin requires special FDA and Abbreviated New Drug Application (ANDA) approval before hitting the market.

Additionally, the market for pravastatin is described by the case as “inelastic,” meaning levels of supply and demand shift only slightly.

“Market inelasticity, combined with a high degree of commoditization, substantial manufacturer overlap and other factors, provide reason enough for the defendants to illegally work together,” the lawsuit states.

The Detectives Endowment Association is seeking to certify two Classes of those that purchased pravastatin sodium manufactured by any of the named defendant drug companies from Oct. 1, 2013 through the present. The first proposed Class is asking for a nationwide injunction, and the second proposed Class is seeking state-specific damages.

In September, a similar class action lawsuit was filed against the defendants by an Alabama-based employee welfare plan union, AF or L-AGC Building Trades Welfare Plan. This complaint alleges the companies illegally colluded to fix prices of pravastatin even though they were no known shortages, supply or impurity issues that could have explained such a dramatic price hike.

The Detectives Endowment Association is represented by Gerald J. Rodos, Jeffrey A. Barrack, Jeffrey B. Gittleman and Chad A. Carder of Barrack Rodos & Bacine.

The Pravastatin Price-Fixing Class Action Lawsuit is Detectives Endowment Association of the City of New York v. Actavis Holdings U.S. Inc., et al., Case No. 2:17-cv-00013, in the U.S. District Court for the Eastern District of Pennsylvania.