Six prominent pharmaceutical companies have just become entangled in an antitrust lawsuit. The generic drug companies companies have been accused of conspiring together to form a monopoly over a number of medications.
On Dec. 14, former Heritage Pharmaceuticals CEO Jeffrey Glazer and former president Jason Malek were charged with colluding with other drug companies and fixing prices. The court filings against the two were unsealed in Philadelphia, revealing that the conspiracy extends to at least five other pharmaceutical companies, Bloomberg reports.
Both Glazer and Malek have been accused of colluding with other drug companies to monopolize the sale of two generic medicines from April 2013 through December 2015. The two drugs in question are doxycycline hyclate, which is used to treat acne, and the diabetes medicine glyburide, according to Forbes.
The conspiracy amongst the drug companies was uncovered during a federal probe launched in Connecticut in 2014. In August 2016, both Glazer and Malek were fired from Heritage Pharmaceuticals for allegedly embezzling millions of dollars from the company over the previous seven years. Heritage had listed their collusion with other drug companies as one of their schemes.
"Through one particularly audacious scheme, Glazer and Malek, together with other co-conspirators, secretly arranged deeply discounted sales of Heritage products to their dummy corporations or through complicit third parties willing to act as straw buyers in return for bribes," the company stated in the court documents.
On Nov. 15, attorneys general from 20 states filed a joint antitrust lawsuit against all six drug companies that have been implicated in Glazer and Malek's scheme. The accused pharmaceutical firms include Heritage, Aurobindo Pharma USA, Citron Pharma, Mayne Pharma, Mylan Pharmaceuticals and Teva Pharmaceuticals, the New York Daily News reports.
The antitrust lawsuit is led by the attorney general of Connecticut. Other participating states include Florida, Maryland, New York and Virginia.
"Generic drugs play a critical role in moderating healthcare costs for all New Yorkers," said Democratic Attorney General Eric Schneiderman of New York. "Companies that collude and fix prices for generic drugs in order to pad their profits must be held accountable for the very real harm they inflict on New Yorkers' ability to pay for life-saving medications."
In 2015, generic drug sales were up to the tune of $74.5 billion, with 88 percent of all prescriptions in the U.S. being written for generic medicines. Doxycycline hyclate was prescribed 12 million times in 2015, while glyburide was prescribed 4 million times.