Econazole Class Action Says Makers Engaged in Price-Fixing Scheme

An employee health and welfare benefit plan for an electrical workers’ union filed a proposed class action lawsuit accusing three drug makers — Perrigo, Taro Pharmaceutical, and Teligent — of fixing the price of a generic skin cream used for treating inflammatory skin infections and raising the cost by 539 percent.

Econazole is a potent topical antifungal cream used for the treatment of variety of severe inflammatory skin infections including eczema, and is one of the most prescribed antifungal dermatological drugs in the United States.

In 2014, Perrigo’s Econazole sales exceeded $146.7 million. Taro’s Econazole sales for the same period exceeded $41.4 million and Teligent’s 2014 Econazole sales exceeded $14.49 million. Based on these sales, these companies represent 97.3 percent of the generic Econazole market.

According to the complaint brought by NECA-IBEW, Econazole experienced a dramatic price increase in mid-2014. Prior to June 2014, the average price for Econazole had remained stable at $0.79 per unit since at least as early as January 2011.

“Normal market forces cannot explain these dizzying hikes,” the complaint says.

In fact, the lawsuit alleges that this price hike came about immediately after Perrigo, Taro Pharmaceutical, and Teligent attended a June 2014 generic pharmaceutical manufacturer meeting in Betheseda, Maryland.

After this meeting, the companies “collectively and dramatically inflated their generic Econazole prices.”

“In that timeframe, average Econazole prices increased nearly 539% and have since been maintained at this supracompetitive levels,” the lawsuit states.

The lawsuit further claims that trade associations likely facilitated the Econazole price-fixing scheme.

According to the class action lawsuit, this conduct by the drug companies has been the target of governmental investigations into anticompetitive generic drug pricing. In November 2016, it was reported that the DOJ expects to file charges arising from its investigation by the end of this year, the lawsuit states.

“There is no reasonable justification for defendant’s abrupt and uniform increase in prices. Rather…the price increases were the result of a continuing agreement in restraint of trade to raise and fix the price of generic Econazole.”

NECA-IBEW is seeking to represent a nationwide Class of consumers who purchased Econazole since July 25, 2014 and seeks injunctive relief, damages under state antitrust and consumer protection laws and all other appropriate relief for the defendants’ alleged wrongdoing.

NECA-IBEW Welfare Trust Fund is represented by Christopher A. Seeger, David R. Buchanan and Jennifer R. Scullion of Seeger Weiss LLP, David W. Mitchell, Brian O. O’Mara, Alexandra S. Bernay, Arthur L. Shingler III, Carmen A. Medici, Samuel H. Rudman, Paul J. Geller and Mark J. Dearman  of Robbins Geller Rudman & Dowd LLP, Damien J. Marshall, Duane L. Loft, Matthew S. Tripolitsiotis of Boies Schiller & Flexner LLP and Patrick J. O’Hara of Cavanagh & O’Hara.

The Econazole Price-Fixing Class Action Lawsuit is NECA-IBEW Welfare Trust Fund v. Teligent Inc., et al., Case No. 2:16-cv-09398, in the U.S. District Court for the District of New Jersey.