40 U.S. States Sue Teva, Other Drugmakers for 'Multi-billion Dollar Fraud on the American People'

'We all wonder why the prices for generic prescription drugs are so expensive – this is a big reason why,' Connecticut attorney general says, alleging price-fixing conspiracy

Yoram Gabison
Yoram Gabison
Teva CEO, Kare Schultz, speaks in Tel Aviv, Israel, February 19, 2019.
Teva CEO, Kare Schultz, speaks in Tel Aviv, Israel, February 19, 2019.Credit: Ofer Vaknin
Yoram Gabison
Yoram Gabison

Teva Pharmaceuticals is the center of an antitrust lawsuit filed Friday by 40 U.S. states, alleging conspiracy among drugmakers to coordinate prices. "We have hard evidence that shows the generic drug industry perpetrated a multi-billion dollar fraud on the American people," Connecticut Attorney General William Tong, who filed the lawsuit in federal court, said in a statement quoted by Bloomberg.

Over a dozen senior executives at Israeli drugmaker Teva are named in the lawsuit, as well as other officials at other leading generic drugmakers, such as Mylan NV and Pfizer Inc., which lays out a scheme to raise the prices of over 100 medicines over a 19-month period between 2013 and 2015.

The lawsuit, which according to Bloomberg seeks unspecified damages and penalties, specifies that Teva raised the prices of 112 generic drugs and conspired with other companies to fix the prices of 86 others. Some of the prices were raised by over 1000%.

"We all wonder why our health care, and specifically the prices for generic prescription drugs, are so expensive in this country – this is a big reason why," Tong was quoted as saying.

According to excerpts published by Bloomberg of the lawsuit filed in Connecticut, it says "Teva is a consistent participant in the conspiracies identified in this complaint, but the conduct is pervasive and industry-wide. Through its senior-most executives and account managers, Teva participated in a wide-ranging series of restraints with more than a dozen generic drug manufacturers, all of whom knowingly and willingly participated."

Maureen Cavanaugh, former senior vice president at Teva's U.S. subsidiary, currently at Lannett Co., is named as a defendant in the lawsuit, alongside James Nesta, Mylan’s vice president of sales and David Rekenthaler, Teva's former vice president of sales.

The lawsuit filed Friday adds on to a previous complaint filed against Teva and about a dozen other generic drugmakers in 2016, into which, Bloomberg reported, the U.S. Justice Department’s antitrust division is also conducting an investigation. The publication quoted the unit’s chief saying charges would be filed.