Desonide Skin Cream Class Action Alleges Price-Fixing Agreement

An antitrust class action lawsuit alleges that the largest manufacturers of Desonide have conspired together to raise the price of this generic medical skin cream by more than 500 percent.

The complaint asserts that Fougera Pharmaceuticals Inc., Perrigo Company PLC, Sandoz Inc., Taro Pharmaceutical Industries Ltd., and others met with each other in 2013 and entered into a “horizontal price-fixing agreement.”

Because of the illegal agreement to fix prices, the manufacturers have worked in unison and “Defendants’ prices have stabilized at artificially high levels,” according to the complaint.

The skin cream antitrust class action lawsuit states that Desonide is a popular topical corticosteroid for treating skin conditions.

In particular, it is used to treat eczema and dermatitis for children or on sensitive areas such as eyelids.

It has been used since the 1970s, but currently the only three manufacturers of the generic drug are the defendants Fougera, Perrigo, and Taro. Sandoz is also named in the lawsuit because it purchased Fougera in 2012.

The class action alleges that the skin cream manufacturers met in February and again in June of 2013.

The class action contends that then, during one week in July, the “Defendants collectively raised prices for Desonide more than six-fold, with certain product offerings increasing in price by more than 800%.”

By the end of 2013, a small tube of Desonide that used to cost $26.75, now cost almost $225. However, there was no increased costs in making the product, according to the complaint.

And since Desonide is a generic drug, the class action argues that there were no research and development costs that would justify the extreme price increase.

Since 2013, the lawsuit contends that the defendants have stabilized the artificially high price of generic skin cream. “As of September 2016, generic Desonide prices remain more than 500% above their pre-July 2013 levels,” the lawsuit states.

“Defendants’ extraordinary price increases were coordinated,” the Desonide antitrust class action proclaims. And since the manufacturers are competitors in the same market, the complaint states that the agreement between them to fix prices was in violation of antitrust laws.

Besides the dramatic price increases, the complaint argues that other factors also point to the Defendants’ conspiracy in restraint of trade, such as the limited number of manufacturers, the lack of substitute products, and how easy it is for the companies to share information with each other.

Plaintiff Sergeants Benevolent Association Health & Welfare Fund (SBA Fund) states that it provides benefits to roughly 10,000 active and retired Sergeants of the New York Police Department and their families.

The SBA Fund provides pharmaceutical benefits to its members, and is therefore a purchaser of Desonide from the defendants.

The SBA Fund claims that it is an “indirect” purchaser, because it does not buy Desonide directly from the manufacturers.

The skin cream antitrust class action lawsuit seeks to certify a Class of indirect purchasers of generic Desonide topical cream or ointment manufactured by defendants, who reside in 28 states across the country.

The class action wants restitution for the extra prices consumers have paid, as well as treble damages under antitrust law.

The SBA Fund is represented by Peter Safirstein and Elizabeth Metcalf of Safirstein Metcalf LLP, and Daniel C. Girard, Jordan Elias, and Adam E. Polk of Girard Gibbs LLP.

The Desonide Skin Cream Antitrust Class Action Lawsuit is Sergeants Benevolent Association Health & Welfare Fund v. Fougera Pharmaceuticals Inc., et al., Case No. 1:16-cv-07987, in the U.S. District Court for the Southern District of New York.