Lawsuit Filed Against Generic Drug Companies for Pricing Conspiracy

Attorney General Gurbir S. Grewal announced New Jersey, alongside a collation of other states, filed an antitrust lawsuit against 26 drug companies, arguing they conspired to artificially inflate the prices of 80 topical generic drugs.

Grewal said the pricing conspiracy for the drugs, which included creams, gels, lotions, ointments, shampoos, and solutions, was a violation of federal and state antitrust and consumer protection laws.

“The price of many prescription drugs is too high. And our investigations have shown that the high prices for many generic drugs stem from illegal collusion among drug companies and executives,” stated the attorney general.

Conduct Stemming Back to 2009

The complaint alleged that starting in 2009 through early 2016, collusion was “rampant” among manufacturers of generic topical drugs. The suit claimed sales and pricing executives among the companies were well acquainted and used these relationships to restrict competition.

The suit argued Tara Pharmaceuticals USA Inc, Perrigo New York Inc., Sandoz Inc. (formerly Fougera), and Actavis acted as ring leaders of the conspiracy via long-standing agreements to follow each other’s prices increases and to not compete for each other’s customers.

The remaining 22 defendant companies “understood the rules of the road,” according to the suit. New Jersey, 46 other states, the District of Columbia, Puerto Rico, and several U.S. territories were party to the federal lawsuit

Addressing a Broader Pattern of Abuse

The abuse was part of a larger pattern of anticompetitive conduct in the industry for years, according to the suit. It argued representatives of the manufactures would get together at “industry dinners” and other lavish events to reinforce the agreements.

It noted the executives were in near-contact contact during the peak period, with 13 high-ranking executives meeting in January 2014 at a Bridgewater, NJ, steakhouse, including representatives of Actavis, Aurobindo, Lannett, and Perrigo.

The lawsuit represented the third time in the last four years the state participated in a multi-state lawsuit to address the generic drug industry’s anticompetitive conduct.

In January 2017, New Jersey joined in a lawsuit alleging 18 corporate defendants and two individual defendants conspired to fix pricing among 15 generic drugs. The suit remains pending.

Additionally, in May 2019, New Jersey participated in a lawsuit alleging 20 generic drug companies artificially inflated the prices on more than 100 generic drugs. The drugs included oral antibiotics, blood thinners, cancer drugs, contraceptives, statins, blood pressure medications, and more.

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