Generic Blood Pressure Drug Makers Face Antitrust Class Action Lawsuit

Earlier this month, several drug makers were hit with a class action lawsuit accusing them of engaging in a “conspiracy to artificially fix, raise, maintain and/or stabilize the prices of generic propranolol,” in violation of federal antitrust laws.

According to the antitrust class action lawsuit, propranolol is a beta-blocker that is used to treat a number of heart and circulatory conditions. It is reportedly the highest-selling beta blocker.

Plaintiff Cesar Castillo Inc. filed the antitrust class action lawsuit on Jan. 5, claiming that since at least December 2013, the major U.S. manufacturers of propranolol capsules engaged in a price-fixing conspiracy to artificially suppress competition for the popular blood pressure medication.

The defendants named in this antitrust class action lawsuit include Actavis Elizabeth LLC, Breckenridge Pharmaceuticals Inc., Endo International PLC, Heritage Pharmaceuticals Inc., Mylan Inc., Mylan Pharmaceuticals Inc., Par Pharmaceuticals Holdings, Pliva Inc., Teva Pharmaceuticals USA Inc., UDL Laboratories Inc., and Upsher-Smith Laboratories Inc.

“Propanolol is not a new compound,” the blood pressure drug class action lawsuit states. “It has been available on the market since the 1980s. For much of that time, it has been competitively priced significantly below its branded counterpart.”

Cesar Castillo argues that this lower price is possible because the presence of generic drugs on the market usually increases competition. The plaintiff says this competition benefits consumers through lower prices.

Starting in December 2013, Cesar Castillo alleges the defendants conspired to significantly raise the price of propranolol. According to the blood pressure drug class action lawsuit, the defendants first increased the price of propranolol capsules and then later increased the price of propranolol tablets. The plaintiff says the average price of propranolol capsules increased by more than 150 percent in 2014, a price increase he describes as “extraordinary.”

“Defendants’ success in significantly raising Propranolol capsule prices only emboldened them,” the propranolol class action lawsuit alleges. “While the capsule price increases were ‘extraordinary,’ the tablet increases were radical.”

According to the propranolol price-fixing class action lawsuit, the average price of propranolol tablets increased by more than 700 percent in the months following February 2015. Castillo says that, by November 2015, the average price of 80 mg tablets increased by more than 1,000 percent from pre-February 2015 prices.

These drastic price increases reportedly occurred almost simultaneously and remained at supra-competitive prices after February 2015.

“Defendants’ price increases were contrary to their respective unilateral self-interests,” Castillo argues in the blood pressure drug class action lawsuit. The plaintiff says that propranolol is a generic drug, and that without a conspiracy, any manufacturer who substantially increased the price of the drug for unjustified reasons would be faced with competition from other drug makers seeking to sell propranolol to customers who did not want to pay the higher price for the drug.

“In other words, it would be contrary to any manufacturer’s unilateral self-interest to substantially increase its price for Propranolol unless it had agreed with the other manufacturers that they would do the same,” the generic drug price-fixing class action lawsuit alleges.

According to the price-fixing class action lawsuit, the U.S. Department of Justice launched an antitrust investigation into generic drug makers’ marketing and pricing practices.

The attorneys general of several states have reportedly commenced an investigation into these antitrust allegations and uncovered evidence of a “broad, well-coordinated and long-running series of schemes to fix the prices and allocate markets for generic pharmaceuticals,” the class action lawsuit alleges.

The plaintiff seeks to represent a Class of consumers who purchased propranolol capsules directly from the defendants since Dec. 1, 2013.

Cesar Castillo is represented by Linda P. Nussbaum, Bart D. Cohen, Bradley J. Demuth and Peter E. Moran of Nussbaum Law Group PC, and Juan R. Rivera Font of Juan R. Rivera Font LLC.

The Generic Blood Pressure Drug Antitrust Class Action Lawsuit is Cesar Castillo Inc. v. Actavis Elizabeth LLC, et al., Case No. 1:17-cv-00078, in the U.S. District Court for the Southern District of New York.