A large number of U.S. states filed a lawsuit accusing Teva Pharmaceuticals USA of coordinating an orchestrated price-fixing scheme with 19 other drugmakers. The 20 companies are accused of conspiring to reduce competition and inflate prices, sometimes by a factor as high as 1,000 percent, CNBC reports.
Extremely high prices affecting both brand-name and generic drugs have drawn increasing levels of outrage in the United States, prompting innumerable investigations, with politicians on both the left and the right speaking up and demanding action.
According to the complaint, which was filed Friday in the U.S. District Court in Connecticut, the drug companies allegedly engaged in an illegal conspiracy to divide up the market share and avoid competition. Prosecutors are alleging that in some cases, companies either worked together to prevent prices from dropping or actively raise them.
A representative from Teva USA, which is a division of Israeli parent company Teva Pharmaceutical Industries, has said that the company intends to fight the lawsuit.
“The allegations in this new complaint, and in the litigation more generally, are just that — allegations,” the spokesperson said in a statement. “Teva continues to review the issue internally and has not engaged in any conduct that would lead to civil or criminal liability.”
The lawsuit, which runs a lengthy 500 pages, focuses on the generic drug industry, which traditionally produces and sells medications that are no longer protected by parents and, at least in theory, should be substantially less expensive. In the alleged cases, however, the companies are accused of conspiring — through a long history of various secret agreements — to make sure that each competitor has a share of the market, which helps maintain artificially high prices.
Teva Pharm CFO says company did not conspire to fix prices https://t.co/wYcjXxrrIr
— Medical Sales (@medicalinst) May 12, 2019
According to the complaint, this scheme has existed for quite some time, but it got substantially worse beginning in 2012.
“Apparently unsatisfied with the status quo of ‘fair share’ and the mere avoidance of price erosion, Teva and its co-conspirators embarked on one of the most egregious and damaging price-fixing conspiracies in the history of the United States,” the complaint said.
Teva is believed to sit at the center of the conspiracy, coordinating competitors to influence the prices of 86 different medications between July of 2013 and January of 2015. In addition to Teva as a company, 15 individuals have been listed as defendants in the suit, accused of doing the day-to-day work of orchestrating the scheme.
“The level of corporate greed alleged in this multistate lawsuit is heartless and unconscionable,” Nevada Governor Steve Sisolak said in a statement.