Teva Pharmaceutical Industries, the Israeli company that is the world's largest generic drug firm, is suspected of being part of one of the biggest cartels in the history of the United States, according to a report on Sunday by the Washington Post.
Teva is one of more than a dozen generic drug companies under investigation for price fixing and dividing up the market share for 300 generic drugs, the Washington Post said. It cited comments made to the newspaper by Joseph Nielsen, an assistant attorney general and antitrust investigator for the state of Connecticut.
The coordination was allegedly conducted using emails and text and WhatsApp messages — and at steak dinners, cocktail receptions and golf games involving senior executives from the pharmaceutical companies.
The investigation was launched in 2016 when antitrust investigators in dozens of states examined suspected price-fixing of just two drugs, but the investigation expanded rapidly and now includes 47 states. The prices of many generic drugs, including older ones, began to soar in 2013 and 2014, sometimes by thousands of percent. One of the most extreme examples cited by the Post was that of a long-standing asthma drug, albuterol, the price of which jumped by over 3,400%.
The drug is sold by Mylan and Indian generic firm Sun. Mylan, and its president, Rajiv Malik, are said to be major suspects in the case. Malik is reportedly suspected of personal involvement in price-fixing. Shares of Mylan were dual-listed on the Tel Aviv Stock Exchange from 2015 until February of this year.
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Apparently, two senior executives from one of the firms, Heritage, who pleaded guilty to price fixing in a separate case, have turned state’s evidence. Prosecutors appear to be hoping that many of the companies will reach plea agreements and pay huge fines. According to the Post, among the 16 companies accused are some of the biggest names in generic drugs, including Mylan, Teva, Sun and Dr. Reddy’s.
Mylan denied the charges. Teva, Sun and Dr. Reddy’s did not respond to the Post's requests for comment. In a court filing, Teva said allegations of a price-fixing conspiracy “are entirely conclusory and devoid of any facts.”