South Carolina Joins State Coalition in Antitrust Lawsuit Against Teva Pharmaceuticals

Staff Report From South Carolina CEO

Tuesday, May 14th, 2019

Attorney General Alan Wilson joined a 44-state coalition led by Connecticut Attorney General William Tong in announcing a lawsuit against Teva Pharmaceuticals and 19 of the nation’s largest generic drug manufacturers alleging a broad conspiracy to artificially inflate and manipulate prices, reduce competition and unreasonably restrain trade for more than 100 different generic drugs. The lawsuit, filed in U.S. District Court for the District of Connecticut, also names 15 individual senior executive defendants at the heart of the conspiracy who were responsible for sales, marketing, pricing and operations. The drugs at issue account for billions of dollars of sales in the United States, and the alleged schemes increased prices affecting the health insurance market, taxpayer-funded healthcare programs like Medicare and Medicaid, and individuals who must pay artificially-inflated prices for their prescriptions drugs.

The complaint alleges that Teva, Sandoz, Mylan, Pfizer and 16 other generic drug manufacturers engaged in a broad, coordinated and systematic campaign to conspire with each other to fix prices, allocate markets and rig bids for more than 100 different generic drugs. The drugs span all types, including tablets, capsules, suspensions, creams, gels, ointments, and classes, including statins, ace inhibitors, beta blockers, antibiotics, anti-depressants, contraceptives, non-steroidal anti-inflammatory drugs, and treat a range of diseases and conditions from basic infections to diabetes, cancer, epilepsy, multiple sclerosis, HIV, ADHD, and more. In some instances, the coordinated price increases were over 1,000 percent.

The complaint lays out an interconnected web of industry executives where these competitors met with each other during industry dinners, “girls nights out”, lunches, cocktail parties, golf outings and communicated via frequent telephone calls, emails and text messages that sowed the seeds for their illegal agreements. Throughout the complaint, defendants use terms like “fair share,” “playing nice in the sandbox,” and “responsible competitor” to describe how they unlawfully discouraged competition, raised prices and enforced an ingrained culture of collusion.

The lawsuit seeks damages, civil penalties and actions by the court to restore competition to the generic drug market.

“We’ve all seen prices go up for prescription drugs and generics usually make them more affordable. It’s unconscionable that these individuals and companies would work together to increase the prices of these generic drugs that people rely on, in some cases for their lives,” Attorney General Wilson said.

“We have hard evidence that shows the generic drug industry perpetrated a multi-billion dollar fraud on the American people. We have emails, text messages, telephone records, and former company insiders that we believe will prove a multi-year conspiracy to fix prices and divide market share for huge numbers of generic drugs. These are drugs that people in this country rely on every day for acute and chronic conditions and diseases from diabetes and cancer to depression and arthritis.  We all wonder why our healthcare, and specifically the prices for generic prescription drugs, are so expensive in this country—this is a big reason why. This investigation is still in its early stages. We will not stop until these companies and the individuals who orchestrated these schemes are held accountable,” said Connecticut Attorney General William Tong.

The complaint is the second to be filed in an ongoing, expanding investigation that the Connecticut Office of the Attorney General has referred to as possibly the largest cartel case in the history of the United States. The first complaint, still pending in U.S. District Court in the Eastern District of Pennsylvania, was filed in 2016 and now includes 18 corporate defendants, two individual defendants, and 15 generic drugs. Two former executives from Heritage Pharmaceuticals, Jeffery Glazer and Jason Malek, have entered into settlement agreements and are cooperating with the Attorneys General working group in that case.

 Corporate Defendants

Teva Pharmaceuticals USA, Inc.

Sandoz, Inc.

Mylan Pharmaceuticals Inc.

Actavis Holdco US, Inc.

Actavis Pharma, Inc.

Amneal Pharmaceuticals, Inc.

Apotex Corp.

Aurobindo Pharma U.S.A., Inc.

Breckenridge Pharmaceutical, Inc.

Reddy’s Laboratories, Inc.

Glenmark Pharmaceuticals Inc. USA

Greenstone LLC

Lannett Company, Inc.

Lupin Pharmaceuticals, Inc.

Par Pharmaceutical Companies, Inc.

Pfizer, Inc.

Taro Pharmaceuticals USA, Inc.

Upsher-Smith Laboratories, LLC

Wockhardt USA, LLC

Zydus Pharmaceuticals (USA), Inc.

Individual defendants

Ara Aprahamian, Vice President of Sales and Marketing at Taro Pharmaceuticals U.S.A, Inc.

David Berthold, Vice President of Sales at Lupin Pharmaceuticals, Inc.

James Brown, Vice President of Sales at Glenmark Pharmaceuticals, Inc.

Maureen Cavanaugh, former Senior Vice President and Chief Commercial Officer, North America, for Teva

Marc Falkin, former Vice President, Marketing, Pricing and Contracts at Actavis

James Grauso, former Senior Vice President, Commercial Operations for Aurobindo from December 2011 through January 2014. Since February 2014, Grauso has been employed as the Executive Vice President, N.A. Commercial Operations at Glenmark

Kevin Green, former Director of National Accounts at Teva from January 2006 through October 2013.  Since November 2013, Green has worked at Zydus Pharmaceuticals (USA) Inc. as the Vice President of Sales

Armando Kellum, former Vice President, Contracting and Business Analytics at Sandoz

Jill Nailor, Senior Director of Sales and National Accounts at Greenstone

James Nesta, Vice President of Sales at Mylan

Kon Ostaficiuk, the President of Camber Pharmaceuticals, Inc.

Nisha Patel, former Director of Strategic Customer Marketing and later, Director of National Accounts at Teva.

David Rekenthaler, former Vice President, Sales US Generics at Teva

Richard Rogerson, former Executive Director of Pricing and Business Analytics at Actavis

Tracy Sullivan DiValerio, Director of National Accounts at Lannett

Drugs listed in the complaint as subject to price-fixing and market allocation agreements:

Adapalene Gel

Amiloride HCL/HCTZ Tablets

Amoxicillin/Clavulanate Chewable Tablets

Amphetamine/Dextroamphetamine ER (aka Mixed Amphetamine Salts)

Amphetamine/Dextroamphetamine IR

Azithromycin Oral Suspension

Azithromycin Suspension

Baclofen Tablets

Benazepril HCTZ

Bethanechol Chloride Tablets

Budesonide DR Capsules

Budesonide Inhalation

Bumetanide Tablets

Buspirone Hydrochloride Tablets

Cabergoline

Capecitabine

Carbamazepine Chewable Tablets

Carbamazepine Tablets

Cefdinir Capsules

Cefdinir Oral Suspension

Cefprozil Tablets

Celecoxib

Cephalexin Suspension

Cimetidine Tablets

Ciprofloxacin Tablets

Clarithromycin ER Tablets

Clemastine Fumarate Tablets

Clomipramine HCL

Clonidine TTS Patch

Clotrimazole Topical Solution

Cyproheptadine HCL Tablets

Desmopressin Acetate Tablets

Desogestrel/Ethinyl Estradiol Tablets (Kariva)

Dexmethylphenidate

Dextroamphetamine Sulfate ER

Diclofenac Potassium Tablets

Dicloxacillin Sodium Capsules

Diflunisal Tablets

Diltiazem HCL Tablets

Disopyramide Phosphate Capsules

Doxazosin Mesylate Tablets

Drospirenone and ethinyl estradiol (Ocella)

Enalapril Maleate Tablets

Entecavir

Epitol Tablets

Estazolam Tablets

Estradiol Tablets

Ethinyl estradiol and levonorgestrel (Portia and Jolessa)

Ethosuximide Capsules

Ethosuximide Oral Solution

Etodolac ER Tablets

Etodolac Tablets

Fenofibrate

Fluconazole Tablets

Fluocinonide Cream

Fluocinonide Emolient Cream

Fluocinonide Gel

Fluocinonide Ointment

Fluoxetine HCL Tablets

Flurbiprofen Tablets

Flutamide Capsules

Fluvastatin Sodium Capsules

Gabapentin Tablets

Glimepiride Tablets

Griseofulvin Suspension

Haloperidol

Hydroxyurea Capsules

Hydroxyzine Pamoate Capsules

Irbesartan

Isoniazid

Ketoconazole Cream

Ketoconazole Tablets

Ketoprofen Capsules

Ketorolac Tromethamine Tablets

Labetalol HCL Tablets

Lamivudine/Zidovudine (generic Combivir)

Levothyroxine

Loperamide HCL Capsules

Medroxyprogesterone Tablets

Methotrexate Tablets

Mimvey (Estradiol/Noreth) Tablets

Moexipril HCL Tablets

Moexipril HCL/HCTZ Tablets

Nabumetone Tablets

Nadolol Tablets

Niacin ER Tablets

Nitrofurantoin MAC Capsules

Norethindrone/ethinyl estradiol (Balziva)

Northindrone Acetate

Nortriptylline Hydrochloride Capsules

Omega-3-Acid Ethyl Esters

Oxaprozin Tablets

Oxybutynin Chloride Tablets

Paricalcitol

Penicillin VK Tablets

Pentoxifylline Tablets

Piroxicam

Pravastatin Sodium Tablets

Prazosin HCL Capsules

Prochlorperazine Tablets

Propranolol HCL Tablets

Raloxifine HCL Tablets

Ranitidine HCL Tablets

Tamoxifen Citrate Tablets

Temozolomide

Tizanidine

Tobramycin

Tolmetin Sodium Capsules

Tolterodine ER

Tolterodine Tartrate

Topiramate Sprinkle Capsules

Trifluoperazine HCL

Valsartan HCTZ

Warfarin Sodium Tablets

In addition to Connecticut and South Carolina, Alabama, Alaska, Arizona, Colorado, Delaware, Florida, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New Jersey, New Mexico, New York, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, Tennessee, Utah, Vermont, Virginia, Washington, West Virginia, Wisconsin and Puerto Rico joined the suit.