AG Ferguson, bipartisan coalition win $49 million and counting over generic drugs price-fixing conspiracy

AGs assert it was one of the most damaging price-fixing schemes in U.S. history

OLYMPIA - Attorney General Bob Ferguson announced today he and a bipartisan coalition of attorneys general have won more than $49 million so far in their case against major drug manufacturers that conspired to illegally raise prices on hundreds of generic drugs. The conspiracy caused consumers to pay more than 10 times as much for some drugs, ranging from antibiotic ointment to cancer treatments.

As a result of the multistate litigation, Apotex will pay $39.1 million and Heritage Pharmaceuticals will pay $10 million, make significant reforms and cooperate with the case against the remaining companies. Washington's share of these and future resolutions will be determined when the litigation is resolved against all of the companies. Washingtonians who bought generic drugs during the conspiracy are eligible to get the amount they overpaid returned to them through a claims process. What individuals will receive will be determined once all the cases are complete.

"These companies conspired to line their pockets at the expense of Washingtonians," Ferguson said. "Their conspiracy made it harder for people to afford medications they rely on for their health, and even their life. I will hold them accountable."

Lawsuits in the U.S. District Court of the District of Connecticut remain active against 30 other corporations - including some of the nation's largest generic drug manufacturers - as well as 25 company executives for violations of federal and state antitrust laws, including the Washington Consumer Protection Act. The attorneys general assert the conspiracy was one of the most egregious and damaging illegal price-fixing schemes in U.S. history.

Company executives and their sales representatives used code words to meet privately and plan how to artificially raise the prices on generic drugs to increase their profits. Some female sales representatives, for instance, would agree to meet at a "girls' night out," then plan how to collectively and artificially raise prices on generic drugs. Many of the companies raised prices by well over 1,000 percent at the height of the conspiracy. Company executives later destroyed text messages and documents after hearing about subpoenas from the investigation.

If you purchased generic prescription drugs between 2010 and 2018, you may be eligible for restitution from this resolution or future resolutions. To determine your eligibility, visit www.AGGenericDrugs.com, call 1-866-290-0182, or email [email protected].

Bipartisan coalition of AGs takes on the generic drug industry

The attorneys general partnered on three lawsuits against generic drug manufacturers. One case focuses on Heritage Pharmaceuticals' involvement with 17 other companies to fix the prices of 15 drugs. Another case focuses on 20 companies that fixed prices on more than 100 drugs. A third lawsuit involves 26 companies fixing the prices on 80 topical generic drugs used for dermatology. Each lawsuit addresses a different set of drugs and defendants.

The companies agreed to drive up the prices of over a hundred common drugs, from everyday antibiotics such as amoxicillin and penicillin to antidepressants, contraceptives, non-steroidal anti-inflammatory drugs, statins, ace inhibitors, beta blockers and more. These drugs are used to treat a wide range of diseases and conditions, such as diabetes, cancer, HIV, epilepsy, multiple sclerosis, high blood pressure, arthritis, high cholesterol, acid reflux and more. A list of the drugs affected by the scheme is available here.

When a branded drug manufacturer loses exclusive patent rights to a drug, generic drugs can enter the market at a lower cost. While some price increases are normal, prices of hundreds of generic drugs skyrocketed over the course of the conspiracy. Generic drug manufacturers argued publicly that the increases were due to legitimate factors such as industry consolidation, federally mandated plant closures or elimination of unprofitable generic drug product lines.

Privately, however, the companies coordinated their prices at regular industry dinners, lunches, parties, golf outings, frequent telephone calls, emails and text messages. Throughout these communications, the conspirators used 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 within the industry. In addition to female sales representatives' "girls' night out," male executives and employees often met under the guise of an "industry dinner."

The conspirators usually chose to communicate in person or by phone to avoid creating a written record of their illegal conduct. When communications were written, the companies often took calculated steps to destroy evidence of those communications.

The states' lawsuits seek restitution for consumers, damages for state agencies, maximum civil penalties and a court order to stop the illegal conduct and restore competition to the generic drug market.

Antitrust Assistant Attorneys General Paula Pera, Holly Williams and Travis Kennedy, Litigation Support and Administrative Manager Kimberly Hitchcock, and paralegals Michelle Oliver and Tracy Jacoby are handling the case.

The Antitrust Division investigates complaints about potential anti-competitive activity. For information about filing a complaint, visit https://fortress.wa.gov/atg/formhandler/ago/AntitrustComplaint.aspx.

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