Multistate Lawsuits Alleged Conspiracies to Inflate Drug Prices and Limit Competition

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TRENTON – Attorney General Matthew J. Platkin and a multistate coalition announced two significant cooperation agreements and settlement pacts with Heritage Pharmaceuticals and Apotex totaling $49.1 million to resolve allegations that both companies engaged in widespread, long-running conspiracies to artificially inflate and manipulate prices, reduce competition, and unreasonably restrain trade in the market for generic prescription drugs.

As part of their settlement agreements, both firms have agreed to cooperate in the ongoing multistate lawsuits against 30 corporate defendants and 25 individual executives. In addition, consumers may be eligible for compensation for purchasing drugs from these companies.

New Jersey is a member of the coalition of nearly all states and territories that filed three antitrust complaints against generic drug companies, starting with the first lawsuit in 2016. Connecticut is leading the multistate litigation.

A $10 million settlement with Heritage was filed Thursday in the United States District Court for the District of Connecticut in Hartford. A $39.1 million settlement with Apotex is contingent upon obtaining signatures from all necessary states and territories and will be finalized and filed in the District of Connecticut in the near future.

Both companies have further agreed to a series of internal reforms to ensure fair competition and future compliance with antitrust laws.

“Americans already pay the highest prices in the world for prescription drugs, and generic drugs are intended as a way to save on these health costs,” said Attorney General Platkin. “We are pleased that these companies have agreed to cooperate with our ongoing litigation against their colleagues in the generic drug industry.”

“Collusion to inflate generic drug prices is an unconscionable example of placing profits over people,” said Cari Fais, Director of the Division of Consumer Affairs. “Schemes to drive up prices harm consumers, hospitals, health insurers, and taxpayers, and will not be tolerated.”

If consumers believe they purchased a generic prescription drug manufactured by Heritage or Apotex between 2010 and 2018, they may be eligible for compensation. To determine eligibility, call 1-866-290-0182 (Toll-Free), email info@AGGenericDrugs.com, or visit www.AGGenericDrugs.com.

Each lawsuit addresses a different set of drugs and defendants. The first complaint named Heritage, along with 17 other corporate defendants and two individual executive defendants, and has 15 generic drugs at issue. Two former executives from Heritage Pharmaceuticals, Jeffery Glazer and Jason Malek, have since entered into settlement agreements and are cooperating.

The second complaint, filed in 2019, was against Teva Pharmaceuticals and 19 of the nation’s largest generic drug manufacturers. It also included 15 individual senior executive defendants.

The third complaint accuses 26 drug companies of conspiring to artificially inflate the prices of 80 topical generic drugs that account for billions of dollars of sales in the United States. In addition to the corporate defendants, the complaint names ten individual defendants—drug company executives responsible for sales, marketing, pricing, and operations—allegedly involved in the conspiracy. This matter is expected to go to trial soon in Hartford, Connecticut.

Six additional pharmaceutical executives have entered into settlement agreements with the States and have been cooperating to support the States’ claims in all three cases.

The cases all stem from a series of investigations built on evidence from several cooperating witnesses at the core of the different conspiracies, a massive document database of over 20 million documents, and a phone records database containing millions of call detail records and contact information for over 600 sales and pricing individuals in the generics industry.

The complaints lay out an interconnected web of industry executives where these competitors met during industry dinners, lunches, cocktail parties, and golf outings, frequently communicating through telephone calls, emails, and text messages.

In one such exchange, a group email discussion of a steakhouse dinner provides a window into the high living that typically accompanies such outings. One executive asked if his and his colleagues’ meals would be paid for by a rival executive’s company. The rival executive responded: “It’s amazing how many in the group like 18-year-old single malt scotch when they aren’t buying.”

Throughout the complaints, 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.

Deputy Attorney General and Assistant Section Chief of Antitrust Isabella R. Pitt and Deputy Attorneys General Yale A. Leber in the Consumer Fraud Prosecution Section within the Division of Law’s Affirmative Civil Enforcement Practice Group are representing New Jersey in this matter under the supervision of Assistant Attorney General Brian F. McDonough.

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