AG Reyes Announces Significant Updates in Litigation Against Generic Drug Manufacturers

SALT LAKE CITY-Today, Utah Attorney General Sean D. Reyes joined a coalition of 50 states and territories announcing two significant cooperation agreements and settlements with Heritage Pharmaceuticals and Apotex totaling $49.1 million. Both companies allegedly engaged in widespread, long-running conspiracies to artificially inflate and manipulate prices, reduce competition, and unreasonably restrain trade in numerous generic prescription drugs. Both companies have agreed to cooperate in the ongoing multistate litigations led by Connecticut against 30 corporate defendants and 25 individual executives and to a series of internal reforms to ensure fair competition and compliance with antitrust laws.

A motion for preliminary approval of the $10 million settlement with Heritage was filed today in the United States District Court for the District of Connecticut in Hartford. 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.

"The overwhelming evidence of illegal practices is based on databases of over 20 million documents, millions of call detail records, and contact information for over 600 sales and pricing individuals in the generics industry," said Attorney General Reyes. "The settlement with just two of these manufacturers returns nearly $50 million to individuals who overpaid and demands internal changes to prevent future unfair competition and price gouging."

Connecticut's Assistant Attorney General Joseph Nielsen is the lead attorney for a coalition of nearly all states and territories filing three antitrust complaints, starting first in 2016. The first Complaint included 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 agreements and are cooperating. The second Complaint was 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.

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, 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.

In addition to Utah, 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, U.S. Virgin Islands, Vermont, Virginia, Washington, West Virginia, Wisconsin, Wyoming, and Puerto Rico joined in today's announcement.

Purchasers of generic prescription drugs from either Heritage or Apotex between 2010 and 2016 may be eligible for compensation. To determine eligibility, call 1-866-290-0182 (Toll-Free), email [email protected], or visit www.AGGenericDrugs.com.