Attorney General Clark Announces Settlement with Generic Drug Manufacturers over Conspiracies to Inflate Prices and Limit Competition

Vermont consumers could be eligible for compensation

Attorney General Charity Clark announced two significant multistate settlements with Heritage Pharmaceuticals and Apotex which nationally total $49.1 million. The settlements resolve allegations that both companies engaged in widespread, long-running conspiracies to artificially inflate and manipulate prices, reduce competition, and unreasonably restrain trade with regard to numerous generic prescription drugs. As part of their settlement agreements, both companies have agreed to cooperate in the ongoing multistate litigations against 30 corporate defendants and 25 individual executives. Both companies have further agreed to a series of internal reforms to ensure fair competition and compliance with antitrust laws. A $10 million settlement with Heritage was filed yesterday in the United States District Court for the District of Connecticut in Hartford, Connecticut. A settlement with Apotex for $39.1 million is contingent upon obtaining signatures from all necessary states and territories and will be finalized and filed in the U.S. District Court in the near future. The settlements come as the states prepare for the first trial to be held in Hartford, Connecticut. All settlement monies will flow to individual consumers who were impacted.

"Vermonters are struggling to afford the cost of their medications. When pharmaceutical companies distort the market to inflate and manipulate the cost of their drugs, they are lining their own pockets at the expense of Vermonters," says Attorney General Charity Clark. "I am proud to have worked with our partners across the country to reach a settlement with these companies to hold them accountable and provide relief to impacted Vermonters."

A claims administrator will be appointed to notify consumers who may have been impacted. If you purchased a generic prescription drug manufactured by either of Heritage or Apotex between 2010 and 2018, you may be eligible for compensation. To determine your eligibility, call 1-866-290-0182 (Toll-Free), email [email protected]or visit www.AGGenericDrugs.com.

A coalition of nearly all states and territories filed three antitrust complaints beginning in 2016. The first Complaintincluded Heritage and 17 other corporate Defendants, two individual Defendants, and 15 generic drugs. Two former executives from Heritage Pharmaceuticals, Jeffery Glazer and Jason Malek, have since entered into settlement agreementsand are cooperating. The second Complaintwas filed in 2019 against Teva Pharmaceuticals and 19 of the nation's largest generic drug manufacturers. The Complaint names 16 individual senior executive Defendants. The third complaint, to be tried first, focuses on 80 topical generic drugs that account for billions of dollars of sales in the United States and names 26 corporate defendants and 10 individual defendants. 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 are built on sources that include evidence from several cooperating witnesses at the core of the different conspiracies, a 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. Each complaint addresses a different set of drugs and defendants and lays out an interconnected web of industry executives where these competitors met with each other during industry dinners, "girls nights out," lunches, cocktail parties, and golf outings, and communicated via frequent telephone calls, emails and text messages that sowed the seeds for their illegal agreements. 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. Among the records obtained by the States is a two-volume notebook containing the contemporaneous notes of one of the States' cooperators that memorialized his discussions during phone calls with competitors and internal company meetings over a period of several years.

Vermont was joined by Alaska, Arizona, California, Colorado, Connecticut, Delaware, District of Columbia, Florida, Georgia, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico, New York, North Carolina, North Dakota, Northern Mariana Islands, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina, South Dakota, Tennessee, Utah, U.S. Virgin Islands, Virginia, Washington, West Virginia, Wisconsin, Wyoming, and Puerto Rico.

A copy of the Heritage settlement is available here. The Apotex settlement will be finalized and made public in the near future.

CONTACT: Amelia Vath, Outreach and Communications Coordinator, 802-828-3171